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AUTHORS' EDITION
No. 30
PRINTED FOR
B. E. FERNOW,
CHIEF UNITED STATES DIVISION OF FORESTRY.
The Author's Edition is limited to
One Hundred Copies, one copy for
each Contributor.
ONE HUNDRED YEARS OF
AMERICAN COMMERCE
f Reproduced from the painting by filbert Oftuatt, in the Sffiettopolitan SJBuMum of &tj,rt.
with the permiaaion of the owner, fff&r. &3,uqu.atu.i ^jay.
1795
ONE HUNDRED YEARS OF
AMERICAN COMMERCE
CONSISTING OF
ONE HUNDRED ORIGINAL ARTICLES ON COMMERCIAL TOPICS DESCRIBING THE PRACTICAL
DEVELOPMENT OF THE VARIOUS BRANCHES OF TRADE IN THE UNITED STATES WITHIN THE PAST CENTURY
AND SHOWING THE PRESENT MAGNITUDE OF OUR FINANCIAL AND COMMERCIAL INSTITUTIONS
ftigtor? of American Commerce b? $tte f^unDreo &mertcatt0
WITH A
CHRONOLOGICAL TABLE
OF THE IMPORTANT EVENTS OF AMERICAN COMMERCE AND INVENTION WITHIN THE PAST ONE HUNDRED YEARS
EDITED ... '_ .
CHAUNCEY MVDEPEW, LL.D.
"I
ISSUED IN COMMEMORATION OF THE COMPLETION OF THE FIRST CENTURY OF AMERICAN
COMMERCIAL PROGRESS AS INAUGURATED BY THE TREATY OF AMITY, COMMERCE, AND NAVIGATION
NEGOTIATED BY CHIEF JUSTICE JAY AND APPROVED BY PRESIDENT WASHINGTON IN 1795
Illustrated
NEW YORK
D. O. HAYNES & CO.
M DCCC XCV
Entered according to Act of Congress, in the year 1895, by
D. O. HAYNES & Co.
In the office of the Librarian of Congress, at Washington.
ALL RIGHTS RESERVED.
'775700
THE DE VINNE PRESS, NEW-YORK.
EDITOR'S PREFACE
THIS volume illustrates the dignity of labor, the beneficence of liberty, and the
triumphs of invention. It is an epic on the marvels of intelligent work. The
wonders of the material development of the most remarkable of the centuries of
recorded time are exhibited in this gallery of pen -pictures. They are the word-
paintings of artists, each eminent in his own department of beneficent industry. It
is an American story; but the United States is the most conspicuous illustration and
example of the nineteenth century and its results. Peace and free institutions have
furnisjied the opportunity for individual efforts. States constructed, cities founded,
wildernesses settled, and vast populations prosperous in varied industries are the rich
contributions of our country to the world's progress in the past hundred years.
Capital and labor have caused and shared this creation of power and production,
and this volume, which is an encyclopedia of industrial development for a century,
written by business men, is appropriately dedicated to the business men of America.
C. M. D.
PUBLISHERS' INTRODUCTION
THE evolution of an idea is always interesting. In submitting to the public this history
of American commerce, an explanation of the causes in which it had its inception may most
properly premise a review of the finished work. The present year marked for the oldest
commercial paper in America, the " Shipping and Commercial List and New York Price Cur-
rent," the completion of one hundred years of useful existence. In seeking some method of
celebrating the centennial in a manner worthy at the same time of the paper and of the busi-
ness interests of the country, the present idea was evolved. It was decided that in no better
way could service be rendered to the American commercial community than by gathering
together in compact form the interesting facts of its remarkable development. At first the
intention was to present this history in a centennial edition of the paper, and upon this plan
the work was begun. Then, as in the end, the plan contemplated the publication of one
hundred chapters, written by one hundred men representing the great lines into which our
trade and industries had been developed and specialized in recent years. The suggestion of
such a work met with most generous welcome in the business world. Its need was recognized
at once, and its novelty and value elicited eminent aid. The very success of the idea compelled
the changing of the original plan. In the form of a newspaper publication the work would
have lacked permanence and breadth of scope. It seemed almost unfair to interest representa-
tive men throughout the country, who would bring enthusiasm, ability, and experience to the
work of describing the industries of the country, and then to place upon them limitations of
space within which they could do justice neither to themselves nor to their subjects. More-
over, it was not solely as a newspaper centennial that the event was of importance ; it had a
deeper and more extended historical significance. Like the " Shipping and Commercial List"
itself, the centennial to be celebrated was but the natural outcome of a great event in the
history of our establishment as a nation.
In the year 1795 there was ratified by the Senate of the United States, and formally
approved by President Washington, a treaty of amity, commerce, and navigation with Great
Britain. This treaty, negotiated by John Jay, of New York, as envoy extraordinary, secured
to this country a commercial liberty commensurate with its position of national independence,
as recognized in the treaty of peace twelve years before. It conceded the actuality of the
national existence, and implied conviction as to its permanence. Above all, it averted the
almost certain disaster of a war, then imminent, between the two countries. The confidence
it inspired in the business world by its recognition of this country as a treaty power, and
yiii ONE HUNDRED YEARS OF AMERICAN COMMERCE
the immediate advantages it brought to our commerce, are shown in the fact that the foreign
trade of the United States almost doubled in the single year following its making. Arranged
at a time when the American people were smarting under a sense of bitter wrong inflicted
by Great Britain, the many advantages obtained by the Jay treaty were not, at first, fully
appreciated. Political partizanship attacked it blindly, and the great party then clamoring for
an alliance with France denounced it fiercely. In its support, the calmer counsels of such great
statesmen as Washington and Hamilton, representing the conservative and substantial elements
of the nation, finally prevailed, and the treaty was adopted. Time has too fully demonstrated
the wisdom of this action to make necessary a further discussion of the long-since-refuted
arguments by which the consummation of the treaty was opposed. The era it ushered in was
for the nation one of progress and prosperity unprecedented.
The opportunity to celebrate the centennial of our oldest commercial paper as well as that
of our country's commercial progress naturally spurred us on to the highest possible attain-
ment. It was determined to have nothing ephemeral or meretricious about the publication, and
to make it, not a newspaper issue, but a standard book of reference, prepared under the best
literary guidance and made with the best mechanical skill. The opportunity was in every way
worthy of the undertaking, for in addition to the commemoration of commercial liberty there
was demanded a permanent and authentic record of the results accomplished through this
liberty. Properly produced, such a history of American commerce would not only do long-
delayed justice to the memory of the patriots of one hundred years ago, but would apprecia-
tively recognize the men who by their industry and genius have aided in the industrial advance
of this country, and would provide for the present and the future a source of inspiring and
stimulating knowledge of the grandeur of American achievement. It was to this end that this
history of American commerce, as it now appears, was undertaken, and in this spirit the work
has been carried on throughout. The incentive and the material were at hand, and the men
whose influence had directed our commercial activities in the crowning years of the century were
still here to aid in making the work authentic and complete.
These considerations were presented to Hon. Levi P. Morton, Governor of the State of New
York, and to Dr. Chauncey M. Depew. Governor Morton at once Accepted the assignment of
" American Banking," and Dr. Depew generously consented to edit the entire work. From
this time the success of the undertaking was assured. The merits of the plan impressed the
leaders in other lines of industry, and the most generous cooperation followed. In choosing
the men to contribute the various articles, the editorial committee, to whom was delegated the
authority of selection, considered but one question : Was each fitted by ability and experience
to represent the industry with which he was identified ? No other question entered into the
matter. Political considerations were especially avoided. The work was to be simply a
magazine of facts collated by men who knew their significance, and made interesting with the
vitality of actual experience, — a book about business, by business men, for business men, — a
record of events in the departments of enterprise and production, with such reference to causes
and conditions as should be necessary to describe intelligently those events.
If the need of such a history was understood before, it certainly became more impressive
as the work upon the book progressed. For a century the commercial history of the United
States had remained unwritten, and records such as the compiler of political and universal
ONE HUNDRED YEARS OF AMERICAN COMMERCE U
history finds preserved for his reference, were not obtainable for a work of this character. They
were scattered, incomplete and often conflicting, through every conceivable channel, from the
old ledger entries of long-forgotten firms to the modern monographs in the files of periodical
publications. The wisdom of dividing the work into one hundred chapters written by one
hundred contributors now received corroboration anew. Upon no other plan could the data
essential to the work have been gathered ; nor by any other means could the publication have
obtained that historical accuracy and standard of authenticity which a work of this kind must
possess to have permanent value. No one historian, however industrious or versatile, could
have written " One Hundred Years of American Commerce." Only by the cooperation of the
leaders in every branch of industry treated could the desired results have been obtained, and it
is here due to the writers of this book to state that, chosen as they have been from the ranks
of the busiest men of to-day, they have still found time cheerfully and ably to cooperate for
the patriotic purposes of this history of American commerce. In order that the reader may
understand something of the plan upon which the work was written by these contributors,
we quote from the first letter of suggestions sent out by the editorial committee in charge
of the work :
" As to the character of the work. In the varied individuality of style, naturally resultant
upon so many contributors, we hope to escape that dullness of machine-made history which
keeps so many otherwise useful volumes unread. Therefore upon every contributor we would
impress the fact that he should not sacrifice his personal style or preferences. It is not the
encyclopedic knowledge of the pedant that the world wants to-day. It is the living acquain-
tance with men and things, causes and effects, that shall show what is and the promise of what
is to be. The information that every successful man has of his own business is of greater value
than the statistics of the records. In our work we desire to bring the man and the records
together, and to have him show the meaning of the records in the light of his personal and
practical knowledge. Is this to be a statistical or a descriptive work? is an important question
that has been asked. Are the articles to be nearly all statistics, and is the progress in the
various lines to be shown by figures or by words? The answer is that this is to be both a
statistical and a descriptive work ; but the statistics are to be subordinated to the description,
or not used at all unless they are necessary to the description. Description without statistics
would have no force ; statistics without description would be meaningless to many. The union
of the two in the hands of men who know the significance of the statistics they cite will give
these articles their interest and weight. In dealing with branch or allied subjects pertinent to
the article under discussion, contributors are recommended merely to summarize the cognate
subject briefly and with special reference to its application. There are so many ramifications of
every great industry that to attempt to follow more than the main story would be impossible.
To conform to the centennial feature of the work, it has been decided to limit the number of
chapters to one hundred. A history of ' one hundred years of American commerce, in one
hundred chapters, by one hundred Americans,' has the ring of a slogan of success. And the
men in charge of this work will keep constantly before their minds not only the making of the
work, but the making it of such a nature that business men will not only need but want it. A
strong, accurate, and true record, as well as an attractive one, is the aim."
The policy persistently observed has been studiously to refrain from interfering with either
i ONE HUNDRED YEARS OF AMERICAN COMMERCE
the style or method of treatment by which each writer has stamped his own individuality upon
his work. The editors have attempted no greater uniformity than that which was necessary to
prevent extended and useless duplication in allied subjects. If, therefore, the reader of this
book finds that its chapters are not always uniform in length or treatment, he is but noting the
differences which must exist in literary work among one hundred men. In these very differ-
ences exists one of the most interesting and most effective phases of the history. In presenting
the book herewith it is only necessary to add that each article bears the trade-mark of its
quality in the signature of its contributor. When it is further recalled that actual personal
knowledge covering from one half to two thirds of the century under discussion, and directly
received but hitherto unpublished oral tradition concerning the remainder, are possessed by the
majority of the relators, the present work has had sufficient testimony to its worth. The figures
accompanying each article are such as are deemed the most authentic, and have been derived
from every available source. In the frequent preference given to the reports of the United
States census the writers have taken the stand that, however imperfect these may have been
found in certain particular instances, they are still, taken collectively and with due regard to
their official nature, the soundest basis for comparisons covering extended periods. Where
particular trades have preserved their own records, and these have been considered reliable,
figures have been based upon them, while in other instances special statistics personally
compiled by the writer have been given. In all these cases the figures given are considered
the most authentic by the writers, and this judgment by them must be the support for
their accuracy.
The method pursued in dividing the work into its one hundred chapters so as both to
comprehend and to distinguish all the great factors in the industrial activities of the country
will be apparent upon examination of the Table of Contents. Beginning with great national
interests, as banking and interstate commerce, the classification follows through the great
corporate subdivisions of industry, — as the telegraph, ship-building, newspapers, — then through
the products of the earth — as cotton, rice, and sugar — and our natural resources, — as mines,
live stock, etc., — and so on down through the long list of manufactures in which the genius of
America has been shown, to the mercantile activities comprised under the various trades. The
chapter numbered XCIX, " Other Industries," was introduced to provide representation for
other more or less important industrial factors not elsewhere treated.
The editorial management of the history, under Dr. Depew, has been conducted by Mr.
Thomas C. Quinn. Of the associate editors whose work deserves mention are Mr. Wesley W.
Pasko, Mr. William Douglas Willes, and Mr. Charles Frederick Stansbury. Mention should
be made also of the work of Mr. John Winfield Scott, whose wide acquaintance and patriotic
labors did much toward making possible the final successful result. For the typographical
excellence of the book-maker's art evidenced in this volume, credit is due to the De Vinne
Press, to whose reputation for elegance and fine work little can be added. The art work of
the history was placed in charge of the artist William C. Smith, of whose skill many of the
portraits in this work give evidence. The engraving of the portraits drawn by Mr. Smith, as
well as the reproduction of the other portraits, was done by the Gill Engraving Company.
Words of recognition are also due to the L. L. Brown Paper Company, of Adams, Mass., for
their care in the manufacture of the hand-made paper for the authors' edition of the history.
ONE HUNDRED YEARS OK AMERICAN COMMERCE
li
One result of the work upon this history which was not directly foreseen when the project
was conceived has been the setting aside of December igth as " Commercial Day," in honor of
the centennial of American commercial liberty, and in recognition from year to year hereafter
of the beneficent results of American industry and enterprise which this history of American
commerce both demonstrates and commemorates. The idea of this celebration came to Dr.
Depew through his editorial work on this history. His suggestion of Commercial Day has
already been taken up throughout the country. The Chamber of Commerce and the Board of
Trade of New York led off in the movement. In the resolutions passed by the Chamber of
Commerce their leadership in the promotion of Commercial Day was most strikingly justified
by allusion to the fact that it was the solid men of New York, as represented by the Chamber
of Commerce one hundred years ago, who, uninfluenced by partizan clamor, came to the assis-
tance of President Washington in securing calmer consideration for the Jay treaty. Commercial
Day this year will be celebrated with a banquet in New York at Delmonico's, given under the
auspices of the editors and contributors to this history of American commerce, and to which
have been invited representative business men in all lines of industry and from all sections of
the country. Chambers of Commerce and Boards of Trade throughout the country, following
the example set by New York, will commemorate the day with appropriate exercises. From
1895, the centennial of American commercial liberty, will date Commercial Day, devoted to
the interests of American trade and to renewing from year to year the vigor of our national
patriotism and enterprise.
In the closing days of the work on this history the painful news of the death of Mr.
Frederic Gunther was received. Only a few days before his death Mr. Gunther had revised
the proof of his article on the fur trade for the history. This contribution from his experience
will remain to testify to his ability and the success of his business career.
We must finally express our deep sense of obligation to the one hundred Americans who
have cooperated in the production of this history, and to whose enthusiasm, experience, and
ability it is a lasting monument. That our part has been done in a manner which shall be
considered worthy of them and of the commercial interests of our country is the highest praise
for which we hope.
THE PUBLISHERS.
December 10, 1895.
CONTENTS
CHAPTER
I AMERICAN BANKING .
2 AMERICAN LABOR
3 IMPORTS AND EXPORTS
4 INTERSTATE COMMERCE
LEVI P. MORTON, Governor of the State of New York .
CARROLL D. WRIGHT, LL.D., Washington, D. C.,
United States Commissioner of Labor 1 1
WORTHINGTON C. FORD, Washington, D. C.,
Chief United States Bureau of Statistics 20
EDWARD A. MOSELEY, Washington, D. C.,
Secretary Interstate Commerce Commission 25
5 THE POSTAL SERVICE IN COMMERCE . THOMAS L. JAMES, New York,
President Lincoln National Bank, and Ex-Postmaster-General 33
6 OUR MERCHANT MARINE .
EUGENE T. CHAMBERLAIN, Washington, D. C.,
United States Commissioner of Navigation 38
7 OUR COMMERCIAL WEALTH AND VOLUME OF BUSINESS, CHARLES F. CLARK, New York,
President The Bradstreet Company 42
47
8 THE CORPORATION IN COMMERCE . . Col. WILLIAM JAY, New York
9 COMMERCIAL ORGANIZATIONS .
10 ONE HUNDRED YEARS OF NEW YORK COMMERCE, General HORACE PORTER, LL.D., New York 55
. ALEXANDER E. ORR, New York,
President New York Chamber of Commerce 50
11 OUR FOREIGN TRADE FROM A TRADER'S STANDPOINT, CHARLES R. FLINT, New York,
Flint Eddy &* Co., Merchants 63
12 WALL STREET JOHN P. TOWNSEND, LL.D., New York,
President Bowery Savings Bank 67
13 ADVERTISING IN AMERICA
14 FIRE AND MARINE INSURANCE
15 LIFE INSURANCE ....
16 AMERICAN RAILROADS
17 AMERICAN CAR-BUILDING .
18 AMERICAN SHIP-BUILDING
FRANCIS WAYLAND AYER, Philadelphia, N. W. Ayer & Son 76
HENRY H. HALL, New York, Hall & Ifenshaw . . 84
SHEPPARD HOMANS, New York,
First President Actuarial Society of America, and
Corresponding Member Land. Inst. of Actuaries 91
STUYVESANT FISH, New York,
President Illinois Central Railroad 98
JAMES MCMILLAN, Detroit,
United States Senator from Michigan 1 13
CHARLES H. CRAMP, Philadelphia,
President William Cramp & Sons
Ship and Engine Building Co. 1 19
xiv ONE HUNDRED YEARS OF AMERICAN COMMERCE
CHAPTER PAGE
19 THE TELEGRAPH General THOMAS T. ECKERT, New York,
President Western Union Telegraph Co. 125
20 THE TELEPHONE . . . . . . JOHN E. HUDSON, Boston,
President American Bell Telephone Co, 133
21 THE EXPRESS . . . . . . LEVI C. WEIR, New York,
President Adams Express Company 137
22 THE STREET RAILWAYS OF AMERICA . HERBERT H. VREELAND, New York,
President Metropolitan Traction Company 141
23 THE HOTELS OF AMERICA . . . HIRAM HITCHCOCK, New York,
Hitchcock, Darling & Co., Proprietors Fifth Avenue Hotel 149
24 AMERICAN THEATERS ALBERT M. PALMER, New York, Proprietor Palmer's Theater 157
25 AMERICAN NEWSPAPERS .... General CHARLES H. TAYLOR, Boston,
Editor and Managing Proprietor Boston Globe 166
26 THE AMERICAN TRADE AND TECHNICAL PRESS, DAVID WILLIAMS, New York,
Publisher and Proprietor The Iron Age 1 74
27 AMERICAN MINES RICHARD P. ROTHWELL, New York,
Editor The Engineering and Mining Journal 178
28 AMERICAN QUARRYING .... REDFIELD PROCTOR, Proctor, Vt,
United Slates Senator from Vermont 188
29 POWDER AND EXPLOSIVES . . . FRANCIS G. ouPoNT, Wilmington, Del 192
30 AMERICAN LUMBER BERNHARD E. FERNOW, Washington, D. C.,
Chief Division of Forestry, U. S. Department of Agriculture 196
31 PETROLEUM: ITS PRODUCTION AND PRODUCTS, HENRY C. FOLGER, Jr., A. M., LL.B., New York,
Standard Oil Company 204
32 AGRICULTURAL PRODUCTS ^f . . GEORGE E. MORROW, Stillwater, Oklahoma,
President Oklahoma Agricultural and Mechanical College,
,,_„-_ and Director Agricultural Experiment Station 215
33 AMERICAN LIVE STOCK .... LAZARUS N. BONHAM, Oxford, Ohio,
Ex-Secretary Ohio Slate Board of Agriculture 22O
34 AMERICAN COTTON RICHARD H. EDMONDS, Baltimore,
Founder and Editor Manufacturers' Record 231
35 AMERICAN WOOL WILLIAM LAWRENCE, A. M., LL.D., Bellefontaine, Ohio,
President National Wool Growers' Association, and
President Ohio Wool Growers' Association 216
36 AMERICAN HORTICULTURE . . . ALFRED HENDERSON, New York, Peter Henderson & Co. . 248
37 AMERICAN SUGAR JOHN E. SEARLES, New York,
Secretary and Treasurer American Sugar Refining Company 257
38 AMERICAN RICE JOHN F. TALMAGE, New York, Dan Talmage's Sons . . 262
39 AMERICAN FLOUR CHARLES A. PILLSBURY, Minneapolis,
Pillsbury. Washburn Flour Mills Company 266
40 AMERICAN GLASS INTERESTS . . . JAMES GILLINDER, Philadelphia,
President Gillinder & Sons, Incorporated 274
41 AMERICAN POTTERIES .... JOHN MOSES, Trenton, N. J.,
President The John Moses &° Sons Company 285
42 AMERICAN GAS INTERESTS . . . EMERSON McMiLLiN, New York, Emerson McMillin &• Co. 295
43 AMERICAN PAPER MILLS .... WARNER MILLER, Herkimer, N. Y.,
Her/timer Paper Company 302
44 AMERICAN PUBLISHING . . . . JOHN W. HARPER, New York, Harper &• Brothers . . 308
45 AMERICAN PRINTING .... THEODORE L. DE VINNE, New York, The De Vinne Press 314
46 THE IRON AND STEEL INDUSTRY . . CHARLES HUSTON, Coatesville, Pa.,
President Lukens Iron and Steel Company 320
ONE HUNDRED YEARS OF AMERICAN COMMERCE
CHAPTER
47 COPPER AND BRASS
XT
UMi
. ALFRED A. COWLES, New York,
Vice-I'resident Antonio Bran and Copper Company 339
48 LOCOMOTIVE AND ENGINE WORKS . ALBA B. JOHNSON, Philadelphia, Baldwin Locomotive Works 337
MACHINERY MANUFACTURING INTERESTS, WILLIAM SELLERS, Philadelphia,
President and Engineer William Sellers &• Co., Incorporated 346
AGRICULTURAL MACHINERY AND IMPLEMENTS, V^RIDGE M- FOWLER Chicago,
Vite-1'resident McCormick Harvesting Machine Company 352
STOVES AND HEATING APPARATUS . . JEREMIAH DWYER, Detroit,
President Michigan Stave Company 357
PLUMBERS AND STEAM-FITTERS' SUPPLIES, JORDAN L. MOTT, New York,
President J. L. Matt Iron Workt 364
53 BUILDING MATERIALS
. WILLIAM H. JACKSON, New York,
President Jackson Architectural Iron Works 371
54 ELECTRICAL MANUFACTURING INTERESTS, THOMAS COMMERFORD MARTIN, New York,
Editor The Electrical Engineer 377
55 THE PACKING INDUSTRY
56 AMERICAN FISH FOODS .
57 AMERICAN CANNING INTERESTS
58 AMERICAN WINES
59 AMERICAN DISTILLERIES .
60 THE BREWING INDUSTRY .
61 AMERICAN TOBACCO FACTORIES
62 AMERICAN SOAP FACTORIES .
63 THE CHEMICAL INDUSTRY
64 THE LEAD INDUSTRY .
65 THE SALT INDUSTRY .
66 THE BISCUIT INDUSTRY .
67 THE COTTONSEED OIL INDUSTRY
68 THE STARCH INDUSTRY .
69 THE MATCH INDUSTRY .
70 THE ICE INDUSTRY .
71 SODA FOUNTAINS
72 AMERICAN TEXTILE MILLS
73 AMERICAN CARPETS .
74 THE CORDAGE INDUSTRY
PHILIP D. ARMOUR, Chicago, Armour &• Co.
• 383
EUGENE G. BLACKFORD, New York,
Ex-Commissioner of Fisheries 389
EDWARD S. JUDGE, Baltimore,
Editor The Trade, and Secretary National
Association of Canned Food Packers 396
CHARLES CARPY, San Francisco,
President California Wine Association 401
JAMES E. PEPPER, Lexington, Ky., James E. Pepper cV Co. . 407
FRED PABST, Milwaukee, President Pabst Brewing Co. . 413
PIERRE LORILLARD, Junior, New York,
President P. Lorillard Company 418
SAMUEL COLGATE, New York, Colgate &> Co.
422
. HENRY BOWER, Philadelphia,
Henry Bower &* Son, Manufacturing Chemists 429
. WILLIAM P. THOMPSON, New York,
President National Lead Company 433
. HENRY G. PIFFARD, A.M., M.D., New York,
President Genesee Salt Company \\>
. FRANK A. KENNEDY, Cambridge, Mass.,
Kennedy's Branch, New York Biscuit Company 446
. THOMAS R. CHANEY, New York,
President American Cotton Oil Company 451
. THOMSON KINGSFORD, Oswego, N. Y.,
President T. Kingsford cir1 Son 456
. OHIO C. BARBER, Akron, Ohio,
President The Diamond Match Company 460
. ROBERT MACLAY, New York,
President Knickerbocker Ice Company 466
. JAMES W. TUFTS, Boston,
President American Soda Fountain Company 470
. S. N. DEXTER NORTH, A.M., Boston,
Secretary National Association of Wool Manufacturers 475
. SHEPPARD KNAPP, New York, Shcppard Knapp & Co. . 485
. BENJAMIN C. CLARK, Boston, Pearson Cordage Company . 489
xvi ONE HUNDRED YEARS OF AMERICAN COMMERCE
CHAPTKK PACE
75 HIDES AND LEATHER .... ROBERT H. FOERDERER, Philadelphia . 494
76 AMERICAN RUBBER MANUFACTURES . CHARLES L. JOHNSON, New York,
Secretary United States Rubber Company 498
77 AMERICAN WALL PAPERS . . . . HENRY BURN, New York,
President National Wall Paper Company 505
78 AMERICAN MUSICAL INSTRUMENTS . WILLIAM STEINWAY, New York, President Steinway & Sons . 509
79 AMERICAN CARRIAGE AND WAGON WORKS, CHAUNCEY THOMAS, Boston, Chauncey Thomas & Co. .516
So AMERICAN SAFE WORKS .... WILLIS B. MARVIN, New York, Marvin Safe Company . 521
81 AMERICAN SEWING MACHINES . . FREDERICK G. BOURNE, New York,
President The Singer Manufacturing Company 525
82 AMERICAN WATCHES AND CLOCKS . EDWARD HOWARD, Boston,
Founder The E. Howard Watch and Clock Company 540
83 AMERICAN TYPEWRITERS . . . . CLARENCE W. SEAMANS, New York,
Wyckoff, Seamans &> Benedict 544
84 THE BICYCLE INDUSTRY .... ALBERT A. POPE, Boston,
President Pope Manufacturing Company 549
85 THE DRY GOODS TRADE .... JOHN N. BEACH, New York, Tefft, Weller & Co. . . 554
86 THE CLOTHING AND FURNISHING TRADE, WILLIAM C. BROWNING, New York, Browning, King & Co. 561
87 THE BOOT AND SHOE TRADE . . . WILLIAM B. RICE, Boston, Rice <&• Hutchins . . .566
88 THE HARNESS AND SADDLERY TRADE . ALBERT MORSBACH, Cincinnati,
President National Wholesale Saddlery Association 5 75
89 THE FUR TRADE . . . . . . F. FREDERIC GUNTHER, New York, C. G. Gunther's Sons . 579
90 THE JEWELRY TRADE .... CHARLES L. TIFFANY, New York, President Tiffany & Co. 589
91 THE GROCERY TRADE .... JAMES E. NICHOLS, New York, Austin, Nichols <&•* Co. . 595
92 THE FRUIT TRADE JOHN W. Nix, New York, John Nix &• Co. . . .602
93 THE DRUG TRADE JOHN MCKESSON, New York, McKesson & Robbint . . 607
94 THE PAINT, OIL, AND VARNISH TRADE . DANIEL F. TIEMANN, New York, D. F. Tiemann &• Co. . 620
95 THE CONFECTIONERY TRADE . . . ALBERT F. HAYWARD, Boston,
President and Treasurer Fobes, Hayward &= Co. 625
96 THE FURNITURE TRADE .... GEORGE W. GAY, Grand Rapids, Mich.,
Treasurer Berkey 6° Gay Furniture Company 628
97 THE HARDWARE TRADE .... EDWARD C. SIMMONS, St. Louis,
President Simmons Hardware Company 633
98 THE STATIONERY TRADE .... JOHN G. BAINBRIDGE, New York, Henry Bainbridge &* Co. 642
99 OTHER INDUSTRIES ALBERT CLARK STEVENS, New York, Editor Bradstreefs . 6.48
100 THE NEXT ONE HUNDRED YEARS . . CHAUNCEY M. DEPEW, LL.D., New York . . .675
ILLUSTRATIONS
CHIEF-JUSTICE JOHN JAY. FRONTISPIECE
PAGE
LEVI P. MORTON .... 4
CARROLL D. WRIGHT ... 12
WORTHINGTON C. FORD . . 20
EDWARD A. MOSELEY . . 28
THOMAS L. JAMES .... 36
EUGENE T. CHAMBERLAIN 40
CHARLES F. CLARK ... 44
WILLIAM JAY 48
ALEXANDER E. ORR ... 52
HORACE PORTER .... 56
CHARLES R. FLINT .... 64
JOHN P. TOWNSEND ... 68
FRANCIS W. AVER .... 80
HENRY H. HALL .... 84
SHEPPARD HOMANS ... 92
STUYVESANT FISH . . . .104
JAMES MCMILLAN . . . . n6
CHARLES H. CRAMP ... 120
THOMAS T. ECKERT ... 128
JOHN E. HUDSON .... 134
LEVI C. WEIR 138
HERBERT H. VREELAND . 144
HIRAM HITCHCOCK . . .152
ALBERT M. PALMER . . . 160
CHARLES H. TAYLOR . . . 168
DAVID WILLIAMS . . . .176
RICHARD P. ROTHWELL . 180
REDFIELD PROCTOR . . . 188
FRANCIS G. DuPONT ... 192
BERNHARD E. FERNOW . . 200
HENRY C. FOLGER, JR. . .208
GEORGE E. MORROW . . .216
LAZARUS N. BONHAM . . 224
RICHARD H. EDMONDS .
WILLIAM LAWRENCE .
ALFRED HENDERSON .
JOHN E. SEARLES . . .
JOHN F. TALMAGE . . .
CHARLES A. PILLSBURY
JAMES GILLINDER . . .
JOHN MOSES
EMERSON McMILLIN . .
WARNER MILLER . . .
JOHN W. HARPER . . .
THEODORE L. DE VINNE
CHARLES HUSTON . . .
ALFRED A. COWLES . .
ALBA B. JOHNSON . . .
WILLIAM SELLERS . . .
ELDRIDGE M. FOWLER .
JEREMIAH DWYER. . .
JORDAN L. MOTT . . .
WILLIAM H. JACKSON .
T. COMMERFORD MARTIN
PHILIP D. ARMOUR . .
EUGENE G. BLACKFORD
EDWARD S. JUDGE. . .
CHARLES CARPY. . . .
JAMES E. PEPPER . . .
FRED. PABST
PIERRE LORILLARD, JR.
SAMUEL COLGATE . . .
HENRY BOWER ....
WILLIAM P. THOMPSON .
HENRY G. PIFFARD . .
FRANK A. KENNEDY . .
FACING
PAGE
. 232
. 240
. 252
. 26O
. 264
. 268
. 276
. 288
. 296
• 3°4
. 308
324
332
34°
348
352
36o
368
372
380
384
392
396
404
408
416
420
424
43°
436
444
448
PACING
PACK
THOMSON KINGSFORD . . 456
O. C. BARBER 464
ROBERT MACLAY .... 468
JAMES W. TUFTS .... 472
S. N. D. NORTH 480
SHEPPARD KNAPP .... 486
BENJAMIN C. CLARK ... 492
ROBERT H. FOERDERER . 496
CHARLES L. JOHNSON . . 500
HENRY BURN 506
WILLIAM STEINWAY . . .512
CHAUNCEY THOMAS . . .516
WILLIS B. MARVIN. . . .522
FREDERICK G. BOURNE . 528
EDWARD HOWARD ... 540
CLARENCE W. SEAMANS . 544
ALBERT A. POPE 552
JOHN N. BEACH 556
WILLIAM C. BROWNING. . 564
WILLIAM B. RICE .... 568
ALBERT MORSBACH . . .576
F. FREDERIC GUNTHER . 580
CHARLES L. TIFFANY . . 592
JAMES E. NICHOLS ... 596
JOHN W. NIX 604
JOHN McKESSON .... 608
DANIEL F. TIEMANN . . .620
ALBERT F. HAYWARD . . 626
GEORGE W. GAY .... 628
EDWARD C. SIMMONS . . 636
JOHN G. BAINBRIDGE . . 644
ALBERT CLARK STEVENS . 652
CHAUNCEY M. DEPEW . . 676
jml
THE CHRONOLOGY OF
AMERICAN COMMERCE AND INVENTION
WITH OTHER IMPORTANT HISTORICAL EVENTS
1795.
Second Year, President Washington's Second Term.
President, GEORGE WASHINGTON, Virginia.
Vice-President, JOHN ADAMS, Massachusetts.
Secretary of State, EDMUND RANDOLPH, Virginia.
Secretary of the Treasury, ALEXANDER HAMILTON, New York.
Secretary of War, HENRY KNOX, Massachusetts.
Postmaster-General, TIMOTHY PICKERING, Massachusetts.
Attorney-General, WILLIAM BRADFORD, Pennsylvania.
Speaker of the House of Representatives, F. A. MUHLENBURG,
Pennsylvania.
Secretary Hamilton announced his redemption policy, Jan. 15.
Jacob Perkins, of Newbnryport, Mass., patented a machine
for cutting and heading nails, Jan. 16.
Secretary Hamilton resigned, and Oliver Wolcott, of Con-
necticut, succeeded him, Jan. 31.
Federal money first reckoned by decimal system of dollars,
cents, and mills, Feb. 5.
Joseph Habersham, of Georgia, appointed Postmaster-Gen-
eral, in place of Timothy Pickering, resigned, Feb. 25.
National flag established with fifteen alternate red and white
stripes, and a blue union with fifteen white stars, May I.
Jay Treaty ratified by the Senate, June 24; ratifications
exchanged between the two countries, Oct. 28 ; formally an-
nounced by President Washington to the House, December.
The United States agreed to pay annual tribute to the Dey
of Algiers to secure exemption from pirates, Sept. 5.
Spain conceded the free navigation of the Mississippi River,
and the Florida boundaries were established, Oct. 27.
Charles Lee, of Virginia, appointed Attorney-General, in
place of William Bradford.
Timothy Pickering appointed Secretary of State vice Ed-
mund Randolph, resigned, Dec. II.
First issue of the New York Prices-Current, now the Ship-
ping and Commercial List and New York Price-Current,
Dec. 19.
Etienne Bore1 developed an improved method for the extrac-
tion of sugar from the cane.
1796.
Tennessee admitted to the Union, June I.
John Fitch ran the first screw boat using steam power on
the Collect, New York, August.
French Directory refused to recognize the United States
Minister, Charles C. Pinckney, of South Carolina, Sept. II.
Washington issued his farewell address. Sept. 17-
Binny & Ronaldson established in Philadelphia the first
permanent type-foundry.
New York Insurance Company, the second in the country
to take marine risks, incorporated.
Major Isaac Craig and Colonel James O'Hara established
the first glass-works in Pittsburg.
1797.
John Adams inaugurated, March 4.
Thomas Newbold of New Jersey patented first cast-iron
plow, June.
Yellow fever epidemic at Philadelphia and New York, Aug.
French Directory issued decree against American commerce.
Philadelphia Quakers petitioned Congress against slavery.
1798.
Navy Department created. George Cabot first secretary,
May.
Congress suspended commercial relations with France, June.
Alien and Sedition laws passed, July.
First salt manufactory established in Ohio.
Joseph Hopkinson wrote "Hail Columbia."
Imprisonment for debt to the United States abolished.
First machine for making combs patented by Isaac Tryon.
First American vessel launched on Lake Erie.
First merino sheep brought from Spain by Hon. William
Porter.
1799.
Napoleon overthrew the French Directory, and commercial
relations with this country were restored, August.
George Washington died at Mount Vemon, aged 67, Dec. 14.
The government paid 8 per cent, for a $5,000,000 loan.
Yellow fever epidemic in New York.
The Manhattan Company chartered in New York.
First shipment of ice from New York to Charleston, S. C.
Eliakim Spooner took out first patent for a seeding machine.
1800.
Epidemic of yellow fever at Baltimore, August.
War office and Treasury building at Washington burned,
September.
Congress first assembled at Washington, Nov. 22.
General bankruptcy law passed, December.
The Second Census gave the population of the country as
5,308,483.
United States first imported India rubber at Boston.
1801.
John Marshall chief justice of the United States, Jan. 20.
Thomas Jefferson inaugurated, March 4.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Tripoli declared war against the United States, June 10.
The federal judiciary reorganized.
Quarantine established on Staten Island.
First sheet-copper turned out from Paul Revere's mill at
Canton, Mass.
Congressional Library established.
1802.
West Point Military Academy established, March 16.
Ohio admitted to the Union, Nov. 29.
Process for making potato starch patented by John Biddis,
of Philadelphia.
First important powder-works established by Eleuthere I.
du Pont.
Philadelphia Chamber of Commerce established.
Abel Porter & Company commenced the manufacture of
gilt buttons in Connecticut.
1803.
Louisiana purchased from France for $15,000,000, Apr. 30.
Richard French and J. T. Hawkins patented the first con-
trivance for reaping machines, May 17.
First cotton mill established in New Hampshire.
Crawford built the first tavern in the White Mountains for
summer tourists.
First bank established in Cincinnati.
1804.
Lewis and Clark started to explore the Northwest, March.
Machine-embroidering introduced by John Duncan, May.
New Jersey's slaves freed, July 4.
The Burr-Hamilton duel at Weehawken, N. J., July u.
Chicago first settled as a trading post by John Kinzie.
National Bankruptcy Act repealed.
Middlesex Canal completed between Boston and the Con-
cord River.
The manufacture of white lead begun by Samuel Wetherill
in Philadelphia.
Captain John N. Chester imported the first bananas.
Almy & Brown of Providence, R. I., made first consign-
ment for sale of American cottons to Elijah Warren of Phila-
delphia.
1805.
Peace with Tripoli, June 3.
Robert Fulton originated the marine torpedo.
First cargo of ice for export shipped to Martinique by
Frederick Tudor.
First drove of cattle on the hoof for the Eastern market
crossed the Alleghanies.
Printers' ink first manufactured here.
1806.
England proclaimed the blockade of the European ports,
June 16.
France by Berlin decree proclaimed the blockade of Eng-
lish ports, Nov. 21,
The first cargo of anthracite coal shipped to Philadelphia
from the Pennsylvania mines.
First confectionery factory established in New York by
Ridley.
David Melville, of Newport, R. I., made earliest use of gas
to light his house.
First American saws manufactured by William Rowland,
of Philadelphia.
1807.
Aaron Burr's trial for treason began, May 22.
Fulton's first steamboat, the Clermont, made the trip from
New York to Albany, Aug. 1 1.
Aaron Burr acquitted, Sept. I.
The Embargo passed by Congress, Dec. 22.
Patent shot-tower of Paul Beck built on the Schuylkill.
Eli Terry, of Plymouth, Conn., began the manufacture of
clocks by machinery.
Machine for the simultaneous cutting and heading of tacks
patented by Jesse Reed, of Bridgewater.
Shipment of ice from Boston to Havana commenced.
Anthony Tiemann introduced the manufacture of colors.
First wheat-starch factory started at Utica by Edward and
John Gilbert.
1808.
Importation of slaves forbidden, Jan. I.
The P/ucnix, built by John Stevens, of Hoboken, made first
sea trip by steamboat, between New York and Philadelphia.
American Fur Company founded by John Jacob Astor.
First patent for stoves to warm by rarefied air granted to
Daniel Pettibone, of Philadelphia.
Bakewell and Page inaugurated the manufacture of flint-
glass at Pittsburg.
First queensware made by Columbia Pottery Company at
Philadelphia.
1809.
James Madison inaugurated, March 4.
Embargo removed except to French and English ports,
March 15.
Cotton duck for sail-cloth first made in the United States.
Abel Stowell, of Worcester, Mass., patented a machine for
cutting screws.
Discovery of Manhattan Island celebrated by a banquet at
the old City Hotel, New York.
1810.
The Third Census gave the population of the country as
7,239,881.
Peregrine Williamson, of Baltimore, made the first metallic
pens.
Astoria, Oregon, founded by the Pacific Fur Company
and John Jacob Astor.
Kaolin discovered at Monkton, Vermont.
Plan for cantaliver bridge across East River proposed by
Thomas Pope.
George Frederick Cooke, the English actor, inaugurated
the star system in American theatres.
Simmons and Rundel, of Charleston, S. C., patented a pro-
cess for saturating water with " fixed air," producing a sort of
soda water.
1811.
The first steamboat left Pittsburgh for New Orleans via the
Ohio and Mississippi rivers, Oct. 27.
Gen. Harrison defeated Tecumseh at Tippecanoe, Ind.,
Nov. 7.
Congress refused to recharter the Bank of the United States.
First steam ferry-boat ran between Hoboken and New York.
Wooden shoe pegs invented.
Exports of flour exceeded 1,000,000 barrels for the first
time.
1812.
A ninety days' embargo proclaimed, Apr. 4.
Louisiana admitted to the Union, Apr. 30.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
War declared against England, June 18.
Engagement between the Constitution and the Guerriere,
Aug. 19.
The first pin factory was established in New York.
Pittsburgh started the first rolling-mill.
1813.
Engagement between the Chesapeake and Shannon, June I.
Commodore Perry's great Lake Erie victory, Sept. 13.
Two New York men began the manufacture of hair-cloth at
,ahway, N. J.
First Brooklyn ferry ran.
Stereotyping and printing from stereotype plates was
introduced.
First complete mill in the world for turning out raw cotton
as finished cloth, established at Waltham, Mass.
Illuminating gas apparatus patented by David Melville.
Francis C. Lowell brought out the power-loom.
1814.
Washington captured by the British, and public buildings
and records burned, Aug. 25.
Specie payment suspended, Sept. I.
Delegates from New England States convened at Hartford,
Conn., to devise defense against the British independently of
the National Government, Dec. 15.
Treaty of peace with England signed at Ghent, Dec. 24.
Steel plate engraving invented by Jacob Perkins, of New-
buryport, Mass.
1815.
Gen. Jackson defeated the British at New Orleans, Jan. 8.
War against the United States declared by the Dey of Algiers,
March.
Commercial convention with England signed, July 3.
Secretary of the Treasury Dallas proposed a protective tariff.
Steam-power first applied to machinery for cabinet-making.
The first steamboat ascended the Mississippi to Louisville.
1816.
First savings-bank opened in America, at Philadelphia, No-
vember.
Indiana admitted to the Union, Dec. 1 1.
Lighting the streets with gas introduced at Baltimore.
First Seminole war.
Concessions granted by the Spanish government allowing
shipment of ice to Cuba.
Black-Ball packets, the first line, established between New
York and Liverpool.
1817.
United States National Bank opened again at Philadelphia,
January.
James Monroe inaugurated, March 4.
Ground broken in construction of Erie Canal, July 4.
Mississippi admitted to the Union, Dec. 10.
Steam-power first applied to paper-making at Pittsburgh.
Work begun by the United States Coast Survey.
First Deaf and Dumb Asylum established at Hartford, Conn.
Harper's publishing house founded.
Gas employed in lighthouse illumination by David Melville.
Thomas Gilpin & Co. operated the first cylinder machine
for making paper at Wilmington, Del.
Steam navigation began on Lake Erie.
1818.
Congress established the flag with thirteen stripes, and a
star for each State, Apr. 14.
Illinois admitted to the union, Dec. 3.
Western State banks suspended.
Reed principle for musical instruments patented by Aaron
Merrill Peasley.
First line of steam packets on Long Island Sound between
New York and New Haven.
Elisha Mills began the packing industry at Cincinnati.
First stage-coach over the Cumberland road to Wheeling.
The internal revenue tax on whisky abolished.
Du Pont powder-works destroyed by terrific explosion.
First drove of western cattle brought to New York.
1819.
Florida purchased from Spain for $5,000,000, Feb. 22.
The first paper devoted to agricultural interests published
at Baltimore, Apr. 2.
The Odd Fellows organized at Baltimore, Apr. 26.
Steamship Savannah started on first trans-Atlantic trip of
steam-vessel, May 21, and arrived at Liverpool, June 20.
Alabama admitted to the Union, Dec. 14.
Seth Boyden began the manufacture of patent leather at
Newark.
The manufacture of porcelain from domestic materials was
begun in New York by Dr. H. Mead.
Great financial depression existed.
First savings-bank opened in New York.
John Conant of Vermont invented his cooking-stove.
Plow with interchangeable parts patented by Jethro Wood.
Ezra Daggett and Thomas Kensett put up the first canned
goods in New York.
1820.
Thomas Blanchard patented the gun-stock lathe, Jan. 20.
Maine admitted to the Union, March 15.
The Fourth Census gave the population of the country as
9,633,822.
Anthracite coal first used successfully for the generation of
steam at Philadelphia.
The first steamboat ran on Lake Michigan.
First rubber shoes imported from South America.
Daily meeting with regular call of stocks begun on
"Change."
The United States Pharmacopoeia established.
1821.
Missouri Compromise adopted, Feb. 26.
General Jackson took possession of Florida on behalf of
the United States, July I.
Missouri admitted to the Union, Aug. 10.
New York quarantine station and hospitals established
at Castleton, S. I., September.
Sophia Woodhouse, of Wethersfield, Conn., patented the
straw hat, Dec. 25.
American Colonization Society secured Liberia, December.
Bronze printing patented by George J. Newbury.
Remains of Major Andr£ removed from Tappan, N. Y.,
to Westminster Abbey, London.
The rotary steam-engine patented by Mr. Ward, of Colum-
bia, S. C.
The first college of pharmacy established at Philadelphia.
1822.
Treaty of commerce and navigation concluded with France,
June 24.
The Merrimac Manufacturing Company started the city of
Lowell, Mass., Sept. 3.
Mason and Baldwin of Philadelphia began engraving cy-
linders for calico printing.
First patent of artificial teeth secured by C. M. Graham.
xxii
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Iron conduit pipes were first used in the Fairmount Water
Works at Philadelphia.
Thomas Skidmore of New York introduced India rubber
tubes for gaseous fluids.
Naval expedition sent against the West Indian pirates by
United States.
Lock coulter for plows patented by David Peacock of New
Jersey.
Depau's line of Havre packets established.
The first wheel mill for incorporating powder erected on
Brandywine Creek, Del.
Luke Davies opened the first store distinctively for men's
furnishing goods.
1823.
Monroe Doctrine promulgated, Dec. 2. European powers
not to be permitted to interfere with the independent States
of America, or to acquire dominion on this continent.
First steam-power printing-press set up in Albany by a
printer named Van Benthuysen.
Champlain Canal, connecting the Hudson at Albany with
Lake Champlain, opened.
Manufacture and tin-plating of lead pipe for stills was
begun in New York by Thomas Ewbank.
The first smelting-works in the lead region of the upper
Mississippi erected by Col. James Johnson of Kentucky.
Nicholas Longworth of Cincinnati commenced the making
of wine with the muscatel grape.
First corporation for the manufacture of gas started as the
New York Gas-Light Company with a capital of $1,000,000.
1824.
Lafayette arrived at Staten Island on his visit to the United
States, Aug. 15.
The geological survey of North Carolina was begun by
Denison Olmsted.
Zadoc Pratt established a great hemlock tanning factory
in Greene Co., New York.
Cape Cod began to manufacture isinglass from hake.
The first juvenile reformatory established in New York.
Glazed-ground wall-papers were first made.
1825.
John Quincy Adams inaugurated, March 4.
Corner-stone of Bunker Hill Monument laid by Lafayette,
June 17.
Isaiah Lukins of Philadelphia patented the lithotritor in
England, Sept. 15.
First boats left Buffalo by the Erie Canal, Oct. 26.
De Witt Clinton and the first boats arrived in New York
via the Erie Canal, and a grand celebration took place in
this city, Nov. 4.
First performance of Italian opera at New York, Nov. 29.
Isaac Babbitt, of Taunton, Mass., invented Babbitt metal
and commenced the manufacture of Britannia ware.
William Ellis Tucker commenced the manufacture of porce-
lain at Philadelphia.
The so-called labor movement first came into prominence.
The circular saw brought out by Mr. Richardson of Phila-
delphia.
Taylor & Rich erected the first mahogany mill.
1826.
Eli Whitney, inventor of the cotton gin, died, Jan. 8.
New England Society for the Promotion of Manufactures
and the Mechanic Arts chartered, March 3.
Death of John Adams and Thomas Jefferson, July 4.
First railroad with metal rails from Quincy, Mass., to tide
water, three miles away, Oct. 7.
James Oram, founder of the Shipping List and New York
Price Current, died Oct. 27; born May 10, 1760.
National Academy of Design founded in New York.
Power-loom for weaving wire invented by John S. Gastrin,
of New York.
Manufacture of palm-leaf hats begun in Massachusetts.
Ice first cut on Rockland Lake and retailed in New York.
Failures of the great tea importers caused a heavy loss to
the Government in customs duties.
Composition rollers for printing presses first used.
W. Kendall patented the insertable tooth for rotary saws.
1827.
Switchback Railroad operating by gravity opened at Mauch
Chunk, Pennsylvania, Jan. 8.
First general convention of the manufacturing interests
of the country held at Harrisburg, Pa., July 30.
English artists introduced lithography at Boston.
James MoClintin of Chambersburg, Pa., invented the first
practical contrivance for mortising and tenoning.
The manufacture of wood type was begun at New York
by Darius Wells.
The first bell made from blistered bar steel in New York.
Rope factories first applied steam as power at Wheeling.
Sandwich Glass Company made first pressed glass.
First drove of hogs entered Chicago.
Stone for Bunker Hill monument quarried at Quincy.
Harrison Gray Dyar constructed an electric telegraph on
Long Island.
Jacob Perkins built a compound stationary engine, using
steam of 1400 pounds pressure.
1828.
The American Institute organized, Feb. 19.
Heavy duties laid on imported fabrics of cotton or wool,
May 15.
The first wool sale was held at Boston and brought $300,-
ooo, June 10.
First edition of Webster's American Dictionary published,
June.
First American power-loom for weaving checks and plaids
patented by Rev. E. Burt, of Conn., August 19.
Franklin Institute medal awarded Seth Boyden for first
buckles and bits made of annealed cast iron, Oct. 16.
First patent for locomotive issued to William Howard of
Baltimore.
Manufacture of varnish begun in New York by P. B. Smith.
William Woodworth of Hudson, N. Y., invented the first
machine for planing, cutting, tonguing, and grooving boards.
Sea Island cotton first appeared in the market.
The first trip-hammer shop for the manufacture of axes
built by Samuel Collins, at Collinsville, Conn.
Manufacture of horse collars begun by Timothy Deming
at East Hartford, Conn.
Carbondale Railroad, the first on which a locomotive was
used, built.
1828.
Andrew Jackson inaugurated, March 4.
Safety Fund Banking Act passed in New York State, April.
First annual fair at Castle Garden of the American Insti-
tute of the State of New York, Nov. I.
Hamilton Stewart began in Philadelphia the manufacture of
damask table linen, December.
Tin ore discovered at Goshen, Conn., by Prof. Hitchcock.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
The manufacture of sewing silk by machinery begun by
James Conant at Mansfield, Mass.
Dr. John M. Revere of New York perfected the process
of galvanizing iron.
First paper from grass and straw fiber made by machinery
by G. A. Shryock, of Philadelphia.
The Stourbridgt Lion, the first locomotive ever run in this
country, arrived from England.
First American locomotive constructed by Peter Cooper for
the Baltimore and Ohio R.R.
1830.
Joseph Smith organized the first Mormon Church at Man-
chester, N. Y., Apr. 6.
The Welland Canal between Lakes Erie and Ontario com-
pleted, Aug. 3.
The City of Chicago was laid out, Aug. 4.
The Fifth Census gave the population of the country as
12,866,020.
The first astronomical telescope was erected at Yale.
Joseph Dixon began the manufacture of lead-pencils at
Salem, Mass.
First native Georgia gold came to the United States.
The omnibus first appeared in the streets of New York.
Windham, Conn., turned out the first Fourdrinier ma-
chines.
The Baltimore and Ohio Railroad opened its first section
operated by horse power.
Holmes, Hotchkiss, Brown & Elton commenced the manu-
facture of sheet brass at Waterbury, Conn.
First locomotive constructed in the United States for actual
service, the Best Friend, built at West Point Foundry Works
for the South Carolina Railroad.
1831.
The first train drawn by a locomotive ran on the South
Carolina Railroad, Jan. 15.
The Mohawk and Hudson Railroad opened in September.
Discovery of chloroform announced by Samuel Guthrie, of
Sackett's Harbor, N. Y., Oct. 12.
The first four-wheel car trucks used on the South Caro-
lina Railroad.
Timothy Bailey of Albany invented the power-loom for
stocking knitting.
The Morris Canal opened, connecting Newark with the
Delaware river.
The West Feliciana Railroad, the first west of the Alle-
ghanies, incorporated in Louisiana.
The Baldwin Locomotive-Works established in Philadelphia.
Pennsylvania inaugurated a system of internal improve-
ments, consisting of 292 miles of canal and 126 of railroad.
1832.
Asiatic cholera made its first appearance in New York,
June 21.
Commercial and financial distress, July to October.
The first street-railway in the country opened in New York
between City Hall and Fourteenth street, November.
Davis & Gartner, of York, Pa., built three locomotives of
the grasshopper pattern for the Baltimore and Ohio Railroad.
The Nullification Ordinance passed by South Carolina.
First hogs packed in Chicago by George Dole.
Egbert Egberts, of Cohoes, brought out the power knitting-
machine.
First cargo of Sicily oranges and lemons imported.
Manufacture of table cutlery begun in this country.
Use of tan-bark in manufacture of white lead introduced.
First soda water apparatus manufactured by John Matthew*
of New York.
Trowbridge, Dwight & Company established the wholesale
clothing manufacture at New Haven.
First shirt factory established by David & Isaac Judion in
New York.
Swiveling fore-end truck for locomotives introduced to gen-
eral use.
1833.
The first cargo of American ice was exported to India by
Frederick Tudor, May.
The " New York Sun " founded, Sept. 3.
Government funds withdrawn from the Bank of the United
States, October.
The first company to import and breed cattle organized,
Nov. 2.
Commercial treaties were entered into with Austria, Tur-
key, and the Two Kingdoms of Sicily.
Treasury Building at Washington was burned.
Obed Hussey patented and exhibited in Ohio the first practi-
cal reaping-machine.
Ross Winans built the first typical American passenger cars.
The Roxbury India-Rubber Company, the first in the busi-
ness, organized.
Samuel Preston invented the pegging-machine.
The crosshead pump for supplying feed-water to the boiler
in locomotives introduced.
1834.
New York National Guard called out for the first time in
suppressing the anti-abolition riots, April.
Cornelius M. Lawrence first mayor chosen by vote of the
people in New York, May.
Cyrus Hall McCormick patented his reaper, June 21.
The first vessel arrived at Chicago from the lower lakes,
July 12.
Lathe for turning lasts patented, Dec. 25.
First attempt at crushing the oil from cotton-seed made
at Natchez.
Screws were first made entirely by machinery.
Rope-yarn spinner invented in New York.
The first saw-mill in the Saginaw valley built by Harvey
Williams.
Half-crank locomotive driving axles introduced.
The manufacture of door locks begun in Connecticut.
1835.
New York voted to begin the Croton Aqueduct, March.
Solyman Merrick, of Springfield, Mass., patented the first
practical screw wrench, Aug. 17.
Texas declared independence, Nov. 7.
Great New York fire. Loss $20,000,000, Dec. 16.
Chicago opened her first bank and organized a fire de-
partment.
The first house was built on the site of San Francisco.
Samuel Colt began the manufacture of the revolving pistol.
The circular web knitting-machine invented in Connecticut.
Horseshoes were first made by machinery by Henry Bur-
den, at Troy.
Improved methods of minting introduced from Europe by
Franklin Peale.
Pins first made by machinery in New York.
Gas companies organized in Philadelphia and New Orleans.
The "New York Herald" established.
The first furnaces made in New England by William A.
Wheeler, of Worcester, Mass.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Professor Morse exhibited his telegraph in the University
of New York.
First link in rail connection of New York and Boston formed
by the opening of the Boston and Providence Railroad.
1836.
President Nicholas Biddle secured, on Feb. 13, a charter
from the State of Pennsylvania for the Bank of the United
States, the Federal charter of which expired March 30.
Arkansas admitted to the Union, June 15.
Specie Circular issued, July II.
First patent of friction match granted Alonzo D. Phillips,
of Springfield, Mass., Oct. 24.
United States Patent Office and contents burned, Dec. 15.
The manufacture of fine-cut chewing tobacco by machinery
commenced at Centreville, Miss.
Brigham Young was elected president of the Mormons.
First sleeping-car ran on the Cumberland Valley Railroad.
First transatlantic cotton freight steamship built for Savan-
nah merchants.
The first cargo of wheat shipped on Lake Michigan for
Buffalo.
Astor House opened in New York.
First American patent issued for a typewriting machine.
E, R. Campbell patented the coupling together of two pairs
of locomotive driving-wheels.
Rubber belting patented.
Power presses introduced for magazine and newspaper
printing.
James Atwater, of New York, brought out the illuminated
case stove.
J. & L. K. Bridge imported from Sicily the first cargo of
flaxseed.
1837.
Fire at Charleston, S. C., Apr. 27, destroyed 1 158 buildings.
Michigan admitted to the Union, Jan. 26.
Martin Van Buren inaugurated, March 4.
Suspension of banks and general panic, May IO.
Sub-treasuries recommended by President Van Buren,
Sept. 4.
Pitts Brothers patented the combined threshing and clean-
ing-machine, Dec. 29.
Chicago incorporated as a city.
Capt. John Ericsson successfully applied the screw pro-
peller to steam vessels.
The fancy weaving loom was patented by William Crompton.
Canning of corn commenced at Philadelphia by Thomas B.
Smith.
Counterbalance weights introduced for locomotive driving-
wheels.
1838.
Fire at Charleston, S. C., Apr. 27, destroying 1158 buildings.
The Specie Circular repealed, May 31.
Congress constituted every railroad a postal route, July 7.
Capt. Charles Wilkes started on his South Sea explora-
tions, Aug. 18.
The National Silk Society organized at Baltimore, Dec. II.
First New Jersey zinc ores smelted at Washington.
Branch United States mint established at Dahlonega, Ga.
The Smithsonian Institution founded in Washington.
Solid pin heads first manufactured at Birmingham, Conn.
Dimond Chandler began the manufacture of gold spectacles
and silver thimbles at Longmeadow, Mass.
Elisha H. Root, of Collinsville, Conn., invented the first
machine for punching and making the eyes of axes, hatchets,
and hammers.
First shipment of wheat from Chicago.
David Bruce Jr., invented the type-casting machine.
First tiles made by Abraham Miller at Philadelphia.
Steam introduced in heating processes in sugar-refining.
1839.
The first express started by W. F. Harnden between New
York and Boston, March 4.
The United States Bank, rechartered by the State of Penn-
sylvania, failed, Oct. 10.
John William Draper, professor of chemistry in University
of New York, took the first photograph from life, November.
Hot-water heating introduced at Niblo's conservatory.
The ice-plow invented.
First pottery built at East Liverpool, O.
1840.
Adams Express commenced between New York and Bos-
ton, May 4.
First successful iron-furnace with anthracite and hot-blast
fired by David Thomas at Catasauqua, Pa., July 4.
Steamship Britannia, the first Cunard liner, left Liverpool
for New York, July 4.
The Sixth Census gave the population of the country as
17,069,453.
The first castings for structural iron made.
John Ames, of Springfield, Mass., patented the first machine
for making, ruling, and cutting paper.
Henry Disston commenced the manufacture of saws.
Patent for the electric telegraph issued to Professor Morse.
Jonas dickering patented the grand piano with full iron-
frame.
First advertising agency opened in Philadelphia by Volney
B. Palmer.
The manufacture of blasting-powder begun.
Edwin Hodges built first brass-wire-drawing mill at West
Torrington, Conn.
The American buggy first came into general use.
A walking-beam electric engine constructed by Davis &
Cooke.
1841.
William Henry Harrison inaugurated, March 4.
President Harrison died and Vice-president Tyler suc-
ceeded him, Apr. 4.
First edition of Horace Greeley's Tribune, Apr. 10.
First steam fire-engine completed and used in New York,
July.
President Tyler vetoed a bill for a United States Bank,
Aug. 16.
A second bill for a United States Bank vetoed, Sept. 9.
The india-rubber ball patented by Edwin Chaffee, of Cam-
bridgeport.
Congress passed a general bankruptcy law.
Samuel Slocum, of New York, invented a machine to stick
pins in paper.
The manufacture of the metal stencil was begun in Boston
by John Pope.
First electrotypes appeared in " Mapes' Magazine."
Frederick E. Sickles invented the drop cut-off valve gear for
steam-engines.
The first mercantile agency established.
Making of Connellsville coke commenced.
Canning of Maine salmon begun.
The city of Philadelphia acquired its own gas plant.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
1842.
Dorr's Rebellion in Rhode Island, May 18.
Fremont's first western expedition, June 10.
Croton water was let into the Fifth Avenue aqueduct, July 4.
Professor Morse laid first submarine telegraph wire between
New York and Governor's Island, Oct. 18.
President proclaimed treaty settlement with England of
the Northwestern Boundary question, Nov. 10.
The first attempt at a machine for sewing was made by J.
J. Greenough, but proved impracticable.
Reuben Partridge patented the match-splint machine.
John Ryle built the first silk piece loom at Paterson, N. J.
Walworth & Nason introduced the Perkins hot-water heater.
Thomas Kingsford discovered and perfected a process for
making starch from corn.
American ice first exported to London.
First factory for pocket-knives established in Connecticut
1843.
Ericsson built the Princeton, the first screw war vessel
in the world.
Napoleon E. Guerin introduced hatching of eggs by arti-
ficial heat.
The manufacture of manilla grass paper was begun in Bos-
ton by Lyman Hollingsworth.
Improvement in pills patented by Benjamin Brandreth.
Patent issued to Enos Wilder for the first fire-proof safe.
Congress voted an appropriation of $30,000 to Professor
Morse for an experimental telegraph line between Washington
and Baltimore.
1844.
Prof. Morse sent a telegraphic message from Baltimore
to Washington, May 27.
Treaty with China opened several ports there to trade and
residence, July 3.
United States recognized the independence of the Sand-
wich Islands, July 6.
U. A. Boyden built the first turbine water wheel for a
Lowell cotton mill, August.
Williams & Ketcham patented the first mowing-machine,
Nov. 18.
Copper mining was commenced in the Lake Superior region.
Patent granted to Charles Goodyear for the vulcanization
of rubber.
First wall-paper printing-machine imported from England.
Leverett Candee made first boots and shoes from vulcanized
rubber.
Power-loom for ingrain carpets invented by Erastus B.
Bigelow.
A. D. Puffer, of Boston, secured a patent for the first soda-
water cooler.
1845.
President Tyler authorized the annexation of Texas, Mar. i.
Florida admitted to the Union, March 3.
James K. Polk inaugurated, March 4.
Telegraph line between Baltimore and Washington opened
for the public business, April I.
Fire did $10,000,000 damage in Pittsburg, Apr. 10.
Naval Academy founded at Annapolis, Oct. 10.
Texas admitted to the Union, Dec. 29.
Anti-rent riots in New York State.
Borings in Tarentum, Pa., struck petroleum.
E. B. Bigelow invented the carpet-loom.
The manufacture of files was commenced at Matteawan,
N.Y., by John Rothery.
Eastwiclc & Harrison invented the equalizing beam* con-
necting locomotive driving-wheel*.
First shipment of apples from Boston to Glasgow.
Sebastian Chauveau, of Philadelphia, introduced the nie of
machinery in making confectionery.
First slate quarry in Vermont opened by Colonel Allen and
Caleb Ranney at Scotch Hill.
Lowest price on record for cotton.
1846.
Magnetic Telegraph Company organized Jan. 14, and line
completed between New York and Philadelphia, Jan. 18.
War declared against Mexico, May n.
California declared independence from Mexico, July 5.
New Mexico annexed by the United States, Aug. aa.
Elias Howe, Jr., patented the first sewing-machine, Sept. 10.
The anesthetic property of ether discovered by Dr. Wil-
liam T. G. Morton, of Boston, Sept. 30.
Iowa admitted to the Union.
Mormons selected site of Salt Lake City.
Japan refused to open commercial relations with this country.
The " ten-wheel " locomotive introduced.
Oliver R. Chase, of Boston, built first machine for making
lozenges.
Eastern Hotel, in Boston, the first public building to be
heated by steam.
First iron furnace using raw bituminous coal erected at
Lowell, Mahoning County, O.
1847.
Commodore Shnhrick proclaimed the annexation of Cali-
fornia by the United States, Feb. 8.
G. Page patented the revolving-disk harrow, August 7.
The City of Mexico fell to General Scott, Sept. 14.
Zinc was discovered in paying quantities in Lehigh
County, Pa.
Pig iron decarbonized by an air-current into steel by Wil-
liam Kelly, of Kentucky.
Richard M. Hoe patented the type-revolving press.
Farmer constructed an electro-magnetic locomotive which
drew a car containing two persons.
Use of adhesive postage stamps first authorized.
Auction sales of plants and flowers begun in New York.
1848.
John M. Marshall discovered gold in California, Jan. 18.
Treaty of peace with Mexico signed at Guadeloupe Hi-
dalgo, Feb. 2.
Astor Library founded, May.
Wisconsin admitted to the Union, May 29.
First meeting of the American Association for the Ad-
vancement of Science held at Philadelphia, Sept. 20.
Cochituate water introduced into Boston, Oct. 25.
Machine for punching and pointing wooden pegs patented
by Henry P. Westcott.
Suspension bridge completed across the Ohio river at
Wheeling.
Rogers Locomotive Works shipped locomotives to Cuba.
First cast-iron-front building in the world erected in New
York.
Erastus B. Bigelow invented the power-loom for weaving
Brussels and tapestry carpets.
1849.
First diploma to woman physician granted at Geneva, N. Y.,
to Elizabeth Blackwell, January.
First bank established in San Francisco, Jan. 9.
xxvi
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Zachary Taylor inaugurated, March 5.
Great inundation at New Orleans, March.
Astor Place Opera House riots, May 10.
Asiatic cholera epidemic in New Orleans, New York, St.
Louis, Philadelphia, Nashville, Buffalo, Chicago, and Boston,
August.
Connecticut river successfully dammed for utilization of
water-power, Oct. 22.
Overland rush for California commenced.
The improved steam-engine valve patented by George H.
Corliss.
Department of the Interior organized with Thomas Ewing
as first Secretary.
New York Associated Press founded.
Henry Evans of Newark introduced the pendulum press
for can tops.
1850.
The first meeting of influential men was held at Phila-
delphia to consider the question of a transcontinental railroad,
Apr. I.
First number of Harper's Magazine was published, June.
Clayton-Bulwer Treaty promulgated, July 4.
President Taylor died, July 9.
Vice-president Millard Fillmore succeeded to the chair,
July 10.
The manufacture of watches by machinery was commenced
in Boston by Dennison, Howard, and Davis, July.
Fugitive Slave Bill passed, Aug. 23.
California admitted to the Union, Sept. 9.
The Seventh Census gave the population of the country as
22,191,876.
S. S. Putnam, of Neponset, Mass., began the manufacture
of nails for horse shoes by machinery.
Collins Line, the first American line of steamships to Liver-
pool, established under government subsidy.
Export of coal first attained commercial importance.
First ice machine patented.
Thomas Kingsford discovered the food properties of corn-
starch.
Machinery first came into use in the boot and shoe shops.
The manufacture of reed organs commenced.
Page, of Washington, constructed an electro-magnetic loco-
motive of sixteen horse-power.
1851.
Minot's Ledge Light carried away, Apr. 16.
Fire did $3,000,000 damage at San Francisco, May 3.
Southern Rights Convention held at Charleston, May 8.
New York and Lake Erie Railroad completed from Pier-
mont to Dunkirk, May 14.
A second fire destroyed $3,000,000 more property in San
Francisco, June 22.
Nicaragua route between New York and San Francisco
opened, Aug. 12.
Hudson River Railroad completed from New York to Al-
bany, Oct. 8.
Louis Kossuth arrived on his visit to this country, Dec. 5.
Principal room of the Library of Congress destroyed by
fire, Dec. 14.
The canal from Evansville, Ind., to Lake Erie completed.
Postal rate established at three cents per half ounce for dis-
tance less than 3000 miles.
Nelson Goodyear patented process for making hard rubber.
A. C. Gallahue, Elmer Townsend and B. F. Sturtevant
patented a pegging machine which cut and drove.
Western Union Telegraph Company established.
Electric locomotive taking its power from a stationary bat-
tery constructed by Thomas Hall, of Boston.
Cyrus H. McCormick wins a great victory with his reaping-
machine at the World's Fair in London.
1852.
Fisheries dispute with England, May 26.
Fire did $5,000,000 damage at Sacramento, Nov. 2.
Commodore Perry started for Japan on his special mis-
sion to open up commerce there, Nov. 24.
United States refused to join England and France in a per-
petual renunciation of annexation designs on Cuba, Dec. I.
The electric telegraph fire-alarm introduced in Boston.
American Pharmaceutical Association organized.
First paints ready mixed for use, made.
Maker's stamp on boiler-plate first demanded by law.
Tilton, Pepper & Scudder start the first plate-glass works
in Brooklyn.
First pottery in Trenton built by Speeler, Taylor & Bloor.
Lamp chimneys first manufactured by Christopher Dor-
flinger in Brooklyn.
1853.
Ericsson's caloric ship made its trial trip, Jan. II.
Franklin Pierce inaugurated, March 4.
Capt. Ringgold's South Sea expedition sailed, May.
World's Fair opened at the Crystal Palace, in New York,
July 14.
Commodore Perry presented to Japan the President's desire
to establish commercial relations, July 14.
Purchase of Central Park authorized, July 23.
New York Clearing House established, Oct. 11.
The first paper collar was seen in New York.
Lumber-rafting inaugurated by Schulenberg & Borckler.
United States Pottery Company of Bennington made first
inlaid-flooring tiles.
Steam fire-engines put into permanent service in Cincinnati.
Yellow fever epidemic at New Orleans caused 7848 deaths.
1854.
Cyrus Field, Peter Cooper, and others organized the New
York, Newfoundland and London Telegraph Company, Mar. I.
The Homestead Bill passed by Congress to encourage set-
tlement on the public lands, March 3.
Treaty with Japan signed, March 31.
Kansas Nebraska bill passed, May.
Reciprocity Treaty concluded with England concerning the
Newfoundland fisheries, June 7.
Otis Tufts patented an elevator for hotels, Aug. 9.
The steamship Arctic lost at sea and 350 people perished,
Sept. 27.
The Pennsylvania Rock Oil Company, the first petroleum
company, incorporated in New York, Dec. 30.
Registry system established by the post-office.
The first merchant flouring-mill started in Minneapolis.
Mellier process for straw-paper brought out by A. C. Mel-
lier.
G. D. Dows introduced in Boston the first marble soda
fountain.
1855.
The first bridge across the Mississippi river completed at
Minneapolis, Minn., January.
The railroad between Panama and Colon completed, Jan. 28.
Suspension bridge at Niagara completed, March.
Cotton-seed oil first successfully made by Paul Aldige at
New Orleans.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Hugh Burgess patented chemical wood pulp.
Year of the country's greatest maritime construction.
Vacuum pan introduced in the sugar refineries.
Yellow fever ravaged Norfolk and Portsmouth, Va.
1856.
First telegraph cable laid across the Hudson at New York,
Feb. 12.
The first railroad in California was completed, Feb. 22.
Central Park purchased for $5,398,695, February.
The first street-railroad in New England began running be-
between Boston and Cambridge, March 26.
George Esterly patented a corn cultivator, April 22.
New York, Newfoundland, and London Electric Telegraph
Company organized, May 6, and cable laid to Newfoundland.
Statue of George Washington was unveiled in Union Square,
July.
Gail Borden patented condensed milk, Nov. 4, and its man-
ufacture commenced at Litchfield, Conn.
Bessemer steel first made at Phillipsburg, N. J.
Cyrus W. Field established telegraphic communication with
Newfoundland.
Sorghum was introduced.
The first vessel made the passage from Milwaukee to Eu-
rope via the Welland Canal, Great Lakes, and St. Lawrence
river.
First refined spelter made at Bethlehem, Pa.
Borax discovered in California.
Use of the adhesive postage-stamp made compulsory.
1857.
James Buchanan inaugurated, March 4.
Dred Scott decision, March 6.
First great strike and railroad riots commenced on the Balti-
more and Ohio, Apr. 27.
Pennsylvania Railroad bought for $7,500,000 the railway
and canal system built by the State, June 25.
Police riots began in New York, July 3.
Ohio Life and Trust Company suspended, and a financial
panic followed, Aug. 24.
First and unsuccessful attempt to lay a transatlantic tele-
graph cable, August.
Specie payment suspended, Oct. 15.
Resumption of specie payment, Dec. 4.
General Rodman began his experiments to discover pressures
in the bores of guns at the moment of firing.
The Steamship Central America, having on board $7,800,-
ooo of treasure from California, foundered off the Cuban coast.
The manufacture of straw-paper begun by J. B. Falser at
Fort Edward.
Japan teas appeared in the market
1858.
Minnesota admitted to the Union, May 1 1 .
First transatlantic cable successfully laid, Aug. 4.
First message sent over the transatlantic cable, Aug. 16.
Peter Cooper presented Cooper Union to the public.
Gold was discovered at Pike's Peak, Colorado.
Wells, Fargo & Company established the Overland Mail
Company.
First cut loaf sugar made in this country.
Greasing-machine patented by W. K. Thornton, of Michigan.
E. S. Drake sank the first petroleum well at Titusville, Pa.
1859.
Oregon admitted to the Union, Feb. 14.
Treaty with China, Aug. 16.
John Brown's Raid on Harper's Ferry, Oct. 16.
D£but of Adelina Patti in opera in New York, Nov. 24.
The improved grand piano patented by Steinway, Dec. 20.
Photolithography for maps in colors was introduced.
First shipment of flour from Minneapolis to the Eait.
Farmer invented the self-exciting dynamo to take the place
of the galvanic battery.
1860.
1 1 7 operatives killed and 312 injured by collapse of the Pem-
berton Cotton Mills in Lawrence, Mass., Jan. 10.
The chain of railroads was completed from Bangor, Me., to
New Orleans, January.
The Japanese ambassadors to ratify Perry's Treaty arrived
at San Francisco, March 27.
The Great Eastern arrived at New York, June 28.
Colonel William Walker, the famous filibuster in Central
America, was shot at Truxillo, Sept. 12.
The Prince of Wales arrived at Washington and visited the
President, Oct. 3.
South Carolina seceded from the Union, Dec. 20.
Central Park was opened to the public.
The Eighth Census gave the population of the country as
31,443,321.
The " oil fever " broke out in the Alleghany River valley.
American merchant marine at the point of its greatest pros-
perity.
First importations of Sisal hemp.
Salt first attained commercial importance in Michigan.
The transcontinental telegraph sanctioned by Congress.
First wrought-iron I-beams rolled by Peter Cooper at Tren-
ton.
Alexander Smith and Halcyon Skinner of Yonkers secured
a patent for power-loom to weave Axminster and Moquette
carpets.
Centrifugal machine introduced in the sugar refineries.
1861.
First shot of the Rebellion was fired in Charleston harbor
against Star of the West, Jan. 9.
Mississippi seceded, Jan. 9.
Florida seceded, Jan. 10.
Alabama seceded, Jan. II.
Georgia seceded, Jan. 19.
Louisiana seceded, Jan. 26.
Kansas admitted to the Union, Jan. 29.
North Carolina seceded, Jan. 30.
Texas seceded, Feb. I.
First flowing oil-well struck in Pennsylvania, Feb. I.
Provisional Confederate Government organized at Mont-
gomery, Ala., Feb. 9.
Jefferson Davis inaugurated president of the Confederacy,
Feb. 19.
Abraham Lincoln inaugurated, Mar. 4.
Fort Sumter fell, Apr. 14.
Virginia seceded, Apr. 17.
Stephen A. Douglas died, June 3.
First balloon reconnaissances, June 23.
Battle of Bull Run, July 21.
Telegraphic communication opened between St. Louis and
San Francisco, Oct. 25.
Capt. Wilkes boarded British steamship Trent and seized
Mason and Slidell, Nov. 8.
First message sent over the transcontinental telegraph line,
Nov. 15.
Banks suspended cash payments, Dec. 30.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Stereotyping for newspapers introduced by the "New- York
Tribune " and " New- York Herald."
The McKay sewing-machine patented.
1862.
Mason and Slidell released and sail for Europe, Jan. I.
First legal tender act passed, Feb. 25.
Battle between the Monitor and the Merrimac, March 9.
The National Guard created by New York, April.
Farragut captured New Orleans, Apr. 24.
Revenue tax imposed on spirits, July I.
Union Pacific Railroad chartered, July I.
Postage stamps used for fractional currency, July.
Announcement of the Emancipation Proclamation, Sept. 22.
Dr. R. J. Catling completed the first Galling gun at In-
dianapolis, Ind., Nov. 4.
Lockhart & Company export first shipment of American oil.
Chicago became the recognized center of the packing in-
dustry.
Confederate cruiser Alabama captured and burned ten mer-
chantmen in two weeks.
Brewers' Association organized.
1863.
3,120,000 slaves freed by the Emancipation Proclamation,
Jan. I.
The National Academy of Science created by Congress,
March 3.
West Virginia admitted to the Union, June 19.
Certificate of authority of the Comptroller of the Currency
issued to the first of the present national banks, June 20.
Battle of Gettysburg, July 1-3.
Draft Riots in New York, July 13-17.
Habeas corpus suspended, Sept. 15.
Distance limit for letter postage in the United States re-
moved.
First harness-thread factory established at Paterson, N. J.,
by Barbour Brothers.
Henry Disston built first crucible-steel melting plant for
saw steel.
The channeling-machine invented by George J. Wardwell
of Rutland, Vt.
The so-called musical telephone brought out by Reis.
1864.
Funding of the greenbacks in the six per cents, stopped,
Jan. 21.
Sanitary Fair opened at Philadelphia, June 7.
Battle between the Kearsarge and Alabama, June 19.
Gold dollar was worth $2.85, July n.
Nevada admitted to the Union, Oct. 31.
From Dec. 1861 to October 1869, the advance in the price
of cotton goods had been 1000 per cent.
Columbia College School of Mines organized, Nov. 15.
General Sherman left Atlanta for the Sea, Nov. 16.
Northern Pacific Railroad chartered.
Postal money-order system established.
George M. Pullman built the " Pioneer," his first car.
1865.
Union troops entered Richmond, Apr. 2.
Lee surrendered, Apr. 9.
President Lincoln assassinated, Apr. 14.
Andrew Johnson succeeded to the presidency, Apr. 15.
Johnston surrendered, April 26.
Jefferson Davis captured, May II.
First rail laid on the line of the Union Pacific, July.
Capt. Wirz, jailer of Andersonville Prison, hanged, Aug. 21.
All restrictions removed from Southern ports, Sept. I.
Martial law ended in Kentucky, Oct. 12.
Habeas corpus restored in the Northern States, Dec. I.
National Wool Growers' Association organized, December.
The Bullock perfecting press brought out.
Polished plate glass first made at Lenox, Mass.
New York Stock Exchange moved into its present building,
Broad and Wall streets.
1866.
France acceded to request of United States to withdraw
troops from Mexico, Jan. 9.
President Johnson publicly denounced the Reconstruction
Committee, Feb. 22.
The President proclaimed the Rebellion at an end, Apr. 2.
Civil Rights Bill passed over President's veto, Apr. 9.
Jefferson Davis indicted for complicity in the assassination
of Lincoln, May 8.
Fenian invasion of Canada, June I.
Commercial convention concluded with Japan, June 25.
Fire did $10,000,000 damage at Portland, Me. , July 4.
Tennessee restored to the Union by Congress, July 23.
The second Atlantic cable successfully laid, Aug. 16.
Convention of workingmen at Baltimore made first demand
for an eight-hour working day, Aug. 21.
The lost Atlantic cable of 1865 brought up, spliced, and laid,
September.
Congress established the elective franchise without respect
to race or color in the District of Columbia, Dec. 14.
Daniel G. Chase, of Chicago, patented a machine for mak-
ing conversation lozenges.
National Board of Fire Underwriters organized.
Salmon canning on the Columbia river begun.
Steinway & Son perfected and introduced the upright piano.
Tallemont & Carrol patented the velocipede with two
wheels.
1867.
French troops evacuated the City of Mexico, Feb. 5.
Nebraska admitted to the Union, March I.
Military Reconstruction Bill passed, March 2.
National Bankruptcy Bill, March 2.
Jefferson Davis released on $100,000 bail, May 13.
The President removed Secretary of War Stanton, Aug. 12.
First steel rails rolled by Cambria Iron Company of Johns-
town, Pa., August.
The President proclaimed general amnesty to all who took
part in the Rebellion, Sept. 7.
Alaska purchased from Russia for $7,200,000, Oct. 9.
Convention of the manufacturers of the country at Cleve-
land, O., demanded the full payment of the national debt,
Dec. 18.
Pullman Palace Car Company organized.
First consignment of California green fruit received in New
York.
Ground wood pulp first put into printing paper.
Hard-rubber-covered harness trimmings patented by An-
drew Albright, of Newark.
American Institute of Architects founded.
Master Car Builders' Association organized.
1868.
The non-concurrence in removal of the Senate returned
Secretary Stanton to the War Department, Jan. 13.
Fire did $3,000,000 damage in Chicago, Jan. 28.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
House resolved that President Johnson be impeached,
Feb. 22.
Race riots between Irish and German immigrants on Ward's
Island, March $.
Impeachment trial of President Johnson begun, March J.
Memorial Statue of Abraham Lincoln unveiled at Washing-
ton, Apr. 15.
Secretary Stanton finally retired and succeeded by Gen.
John M. Scliofield, Apr. 26.
North Carolina, South Carolina, Louisiana, Georgia, Ala-
bama, and Florida again admitted to representation in the
Union, June 12.
Arkansas readmitted to the Union, June 20.
New treaty with China, July 4.
A majority of the States adopted the Fourteenth Amend-
ment to the Constitution, July 20.
Congress passed bill providing for the payment of the na-
tional debt, July 25.
Gen. Grant abolished by proclamation the military districts
as authorized by the Reconstruction Act, July 28.
President Johnson acquitted on impeachment proceedings.
First Westinghouse air-brake used on the Pittsburg, Cin-
cinnati and St. Louis.
Improved typewriting machine patented by C. Latham
Sholes.
First Siemens-Martin open-hearth furnace built at the New
Jersey Steel and Iron Company's works at Trenton.
1869.
Great Niagara Suspension Bridge opened, Jan. I.
Improvements to East River channel began at Hell Gate,
Jan. li.
Ulysses S. Grant inaugurated, March 4.
First transcontinental railroad completed by the junction
of the Union and Central Pacific, May 15.
United States end of first Franco-American cable landed
at Duxbury, Mass., July 23.
Ground broken in the construction of the New York Post-
Office by Col. Joseph Dodd, Aug. 9.
Black Friday in Wall Street, Sept. 24.
Treaty negotiated for the annexation of San Domingo, but
rejected by Senate, Nov. 29.
Cable screw-wire machine for boot and shoe manufacture
invented.
System of traveling theatrical companies introduced.
1870.
Hiram R. Revels of Mississippi, the first colored man elected
to the United States Senate, Feb. 25.
President proclaimed Fifteenth Amendment ratified by the
States, March 30.
Attorney General Hoar and Secretary of the Interior Cox
resigned, June 20.
Kansas Pacific Railroad opened to Denver, Aug. 15.
President proclaimed neutrality in Franco-Prussian trou-
bles, Aug. 22.
General Robert E. Lee died, aged sixty-three, Oct. 12.
The Ninth Census gave the population of the country as
38,558,783.
Mississippi, Texas, and Virginia restored to the Union.
Terra-cotta first generally used for building purposes.
Soleil's polariscope introduced into this country.
Single or continuous process for making wall-paper intro-
duced.
Bigelow attacher and heeling machine introduced in shoe
factories.
Granger movement began in Illinois.
Rhode Island passed first of the drug law*.
Chicago-Omaha railroad pool.
Advertisements in magazines first largely published by
Scribner's Monthly.
1871.
Income-tax law repealed, Jan. 26.
To relieve the destitution in France caused by the Franco-
Prussian War, A. T. Stewart, the New York merchant, sent a
$50,000 cargo of flour to Havre, Feb. 25.
Congress passed the bill for a centennial celebration in 1876,
March 3.
The first Civil Service Commission was authorized, March 3.
Charles Sumner was removed from the chairmanship of the
Senate Committee on Foreign Relations, March 9.
United States and England agreed to submit Alabama claims
to arbitration, May 8.
Ship canal across the Isthmus of Darien reported feasible
by Commander Selfridge, United States Navy, July.
Anti-Tweed mass meeting in New York upon the dis-
covery of his gigantic frauds, Sept. 24.
The great Chicago fire destroyed $200,000,000 worth of
properly in that city, and 250 lives were lost, Oct. 8.
The Post-Office extended its money-order system, making
it international, October.
R. Hoe & Company complete the perfecting press.
Texas Pacific Railroad incorporated.
1872.
Yellowstone National Park created by Congress, Feb. 27.
Amnesty Bill passed by Congress completed the political
reorganization of the country, and filled every seat in the na-
tional legislative body, May 22.
Geneva Tribunal met, and $15,500,000 awarded the United
States on the Alabama claims, June 15.
Import duties on tea and coffee abolished, July I.
Great fire in Boston; damage $75,000,000, Nov. 9.
The Bonanza mines on the Comstock Lode discovered.
First iron oil-tank cars used.
Water-gas process patented by Lowe.
Cable grip patented by Andrew S. Halliday.
Hoffman Brothers made first practical application of the
band saw.
National Stove Manufacturers' Association organized.
Carriage Builders' National Association organized.
1873.
Political riots in New Orleans, March I.
The annual salary of the President of the United States fixed
at $50,000, March 4.
Chicago celebrated the rebuilding in nineteen months of the
entire section laid waste by the great fire, June.
Congress abolished the franking privilege, July I.
Jay Cooke & Co., the New York bankers, failed, and a fi-
nancial panic ensued, Sept. 18.
Acquittal of Mayor A. Oakey Hall of New York on charges
of corruption, Dec. 24.
Westinghouse automatic air-brake introduced.
First Lowe apparatus for water-gas erected at Philadelphia.
Apparatus for hot soda water patented.
First East and West trunk line agreement made at the Sa-
ratoga Conference.
1874.
Mill River dam in Massachusetts burst, destroying four vil-
lages and causing the loss of over 200 lives, May 16.
XXX
ONE HUNDRED YEARS OF AMERICAN COMMERCE
The great steel bridge across the Mississippi at St. Louis
completed by James B. Eads, July 4.
Fire did $4,000,000 damage at Chicago, July 14.
Shore end of a new Atlantic cable landed at Rye Beach, N. Y.,
July 15.
The Lincoln monument at Springfield, 111., dedicated, and
the remains of the martyred President placed in the crypt
prepared, Oct. 15.
Bradford oil field discovered, Dec. 6.
King David Kalakaua of the Hawaiian Islands arrived in
Washington on a visit to the United States, Dec. 12.
James Lick, of San Francisco, deeded millions to a board
of trustees to be used in benevolent undertakings.
Massachusetts passed a ten-hour law.
First trunk pipe-line from oil regions to Pittsburgh.
Barbed-wire manufacture began at De Kalb, 111.
First fast mail on the New York Central Railroad.
1875.
Bloody political riots in New Orleans, Jan. 4.
Senator Sherman's bill for the resumption of specie pay-
ment passed to take effect Jan. I, 1879, Jan. 14.
Hoosac Tunnel completed, Feb. 9.
Oshkosh burned, Apr. 28.
Bank of California in San Francisco suspended, Aug. 26.
Vice-president Henry Wilson died and was succeeded by
Thomas N. Ferry, President pro tern, of the Senate, Nov. 22.
William M. Tweed escaped from his Ludlow Street jailers,
Dec. 4.
Secretary Benjamin H. Bristow exposed the whisky frauds.
First use of natural gas as a fuel in glass-making by Roches-
ter Tumbler Works.
The Palace Hotel opened in San Francisco.
First typewriting machine offered for sale.
1876.
Great forgeries by E. D. Winslow, of Boston, discovered,
Jan. 24.
Gen. O. E. Babcock, private secretary to the President,
acquitted of complicity in the whisky frauds, Feb. 7.
Secretary of War Belknap resigned, under charges, March 2 ;
was impeached and arrested, March 8, and acquitted, Aug. I.
Bell secured his first patent for the telephone, March 7.
A. T. Stewart died, aged seventy-three, Apr. 10.
Dom Pedro, Emperor of Brazil, arrived in New York on a
visit to the United States, Apr. 15.
President Grant opened the Centennial World's Fair in
Philadelphia, May 10.
Peter Cooper was nominated for the presidency by the Na-
tional Greenback party, May 18.
James Bailey, the first of the A. T. Stewart cousins, com-
menced a contest over the will, June.
Secretary of the Treasury Bristow resigned, June 17.
The Custer Massacre, June 25.
Colorado admitted to the Union, Aug. I.
William M. Tweed re-arrested at Vigo, Spain, and returned
to New York, Sept. 6.
Hallett's Point Ledge removed by dynamite, Sept. 24.
The first cremation furnace completed at Washington, Pa.
Oct. I.
President declared South Carolina in a state of insurrec-
tion, and Federal troops were stationed at the polls, Oct. 17.
The famous Hayes-Tilden presidential election, Nov. J.
The Brooklyn Theater fire, 300 lives lost, Dec. 5.
Exportation of dressed beef begun.
Power-loom for hard-drawn wire cloth invented by Wick-
wire, of Cortlandt, N. Y.
1877.
Commodore Cornelius Vanderbilt died, aged eighty-two,
leaving an estate of $100,000,000, Jan. 4.
The Special Commission announced Hayes elected presi-
dent by the Electoral College with 185 votes ; Samuel J. Til-
den, the Democratic candidate, received 184, March 2.
Rutherford B. Hayes inaugurated, March 5.
Alexander Graham Bell successfully tested the telephone
between Boston and Salem, Mass., March 15.
United States troops withdrawn from New Orleans, Apr. 24.
The great Railroad Strike commenced in and about Pitts-
burgh, July I.
Moons of Mars discovered by Asaph Hall, Aug. II.
Canal at Keokuk on the Mississippi completed, Aug. 22.
Brigham Young died, aged seventy-six, Aug. 29.
Bell's improved telephone put into general use.
Goodyear welt machine brought out.
Col. A. A. Pope has the first bicycle built in this country.
1878.
Gold quoted at 101^ on Wall street, being lower than it had
been since 1862, Jan. 23.
Bland Silver Bill passed over President's veto, February.
William M. Tweed died in Ludlow Street Jail, Apr. 12.
The first train ran on the Gilbert Elevated Road on Sixth
Avenue, Apr. 29.
Chin Lan Pin, the first regularly accredited resident ambas-
sador from the Chinese Empire arrived in San Francisco,
July 25.
The first train on the New York Elevated Road on the
East side, Aug. 15.
The repeal of the National Bankruptcy Act became effec-
tive, Sept. I.
Subdivision of the electric current accomplished by Edison,
and incandescent lights introduced, October.
The Manhattan Savings Institution in New York burglar-
ized to the extent of nearly $3,000,000, Oct. 27.
A. T. Stewart's body stolen, Nov. 8.
Yellow fever epidemic in the South. Memphis almost de-
populated.
Wall Street quoted gold at par, Dec. 17.
Knickerbocker Ice Company inaugurated long-distance
shipments of ice by rail.
Blake transmitter for telephones brought out.
1879.
The Government resumed specie payments, Jan. I.
A National Board of Health established, March 3.
The United States Geological Survey created, March 3.
Beef-canning on a large scale introduced by the packing
houses.
1880.
Ferdinand de Lesseps entertained by the American Society
of Civil Engineers at New York, Feb. 26.
The Metropolitan Museum of Art opened in New York,
March 30.
The First National Meet of American bicyclists was held
at Newport, R. I., May 31.
The Egyptian obelisk arrived in New York, July 19.
Dr. Henry S. Tanner of Minneapolis ended a forty days'
fast, Aug. 7.
The Tenth Census gave the population of the country as
50,155,783.
Germany prohibited the importation of American pork.
Knickerbocker Ice Co. imported first Norwegian ice.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
zzzi
Edison built the first electric road at Menlo Park.
California State Board of Viticulture created.
Dongola kid put on the market.
1881.
Representatives from nineteen governments met at an In-
ternational Sanitary Conference in Washington, Jan. 5.
James A. Garfield inaugurated, March 4.
Star Route frauds discovered, March.
The Jtannette Arctic Expedition lost in the ice, June II.
President Garfield assassinated by Charles J. Guiteau, July 2.
President Garfield died, Sept. 19.
Chester A. Arthur succeeded to the presidency, Sept. 20.
Cases against Star Route principals dismissed, Nov. 10.
France prohibited the importation of American pork.
Monroe doctrine emphasized by Secretary Blaine.
1882.
Congress increased the number of representatives in the
House to 325, by a new apportionment based on the census of
1880, February.
Fire did $2,250,000 damage at Haverhill, Mass, Feb. 17.
James G. Elaine's famous eulogy on Garfield delivered in the
House of Representatives, Feb. 27.
Congress passed the first Chinese Restriction bill, May 6.
Guiteau hanged, June 30.
Bill passed to extend the charters of the national banks,
July 12.
National Wholesale Druggists' Association organized.
Mississippi floods rendered 85,000 people destitute.
1883.
The National Civil Service created, Jan. 16.
Revised Tariff adopted, March 3.
Taxes on capital and deposits of the national banks abol-
ished, March 30.
Peter Cooper died, aged ninety-two, Apr. 4.
S. G. W. Benjamin appointed first minister resident to Per-
sia, May.
Treaty concluded with Corea, May 15.
The Brooklyn Bridge opened, May 24.
Gen. Brady and ex-Senator Kellogg, of Louisiana, finally
acquitted on charges connected with the Star Route frauds,
June 14.
Last spike driven in the Northern Pacific Railroad, Sept. 8.
Letter postage reduced to two cents, Oct. I.
Centenary of British evacuation of New York celebrated.
First canneries for Alaska salmon established.
Machine for stuffing horse-collars patented by William
Foglesong, of Dayton, O.
1884.
Commercial Convention with Spain signed, Feb. 13.
Treaty with Mexico ratified, March I.
Mob riots in Cincinnati, March 28-30.
Marine Bank and Grant and Ward failures, May.
Corner stone of pedestal for Statue of Liberty laid, Aug. 5
Treaty of Reciprocity with San Domingo signed, Dec. 4.
The New Orleans Exposition opened, Dec. 16.
National Confectioners' Association of the United States
organized.
Telephone wires first put under ground.
1885.
Washington Monument dedicated, Feb. 22.
Grover Cleveland inaugurated, March 4.
President James D. Fish of the Marine Bank sentenced to
ten years at Sing Sing, June 27.
Gen. Grant died, aged 63, July 23.
Anti-Chinese riots in the Weal, Sept. 2.
Flood Rock in the East River blown up by dynamite, Oct. 10.
Ferdinand Ward sentenced to ten years at Sing Sing, Nor. I.
Fire did $2,500,000 damage at Galveston, Texas, Nov. 13.
Vice-president Thomas A. Hendricks died at Indianapolis,
aged sixty-six, Nov. 25.
Ohio oil field discovered at Lima.
Long-distance telephone introduced to use.
1886.
Senator Hoar's Presidential Succession Bill passed, Jan. 19.
Commission appointed to investigate Jacob Sharp and the
New York " Boodle Aldermen," Jan. 26.
General strike on the New York street-railroads, March 4.
Boycott by Knights of Labor begun on the Gould railroad
system in the West, March 6.
Anarchist riots and bomb throwing in Chicago, May.
The great Charleston earthquake, Aug. 31.
The Statue of Liberty dedicated, Oct. 28.
Steamship Oregon was sunk off the Long Island coast.
Wire nails first manufactured.
First oil-tank steamers built.
Experiments made with electrical locomotives by Frank J.
Sprague on the elevated road in New York.
1887.
Senator Edmund's Retaliatory Bill in the Canadian Fisher-
ies dispute passed, Jan. 19.
The courts twice declared boycotting illegal, February.
The Trade Dollar Bill passed, Feb. 19.
Strike of the Massachusetts shoe factory operatives, February.
Inter-State Commerce Commission created, April 3.
Building trades' strike in Chicago, and stove molders" strike
in St. Louis, April.
Lehigh Valley coal miners went out, Aug. 30.
First vestibule Pullman train in service.
Experiment stations established by the government.
Beet sugar first successfully produced at Alvarado, California.
1888.
Bell telephone patents confirmed by the United States Su-
preme Court, March.
Fisheries treaty negotiated with England but rejected by
the Senate, August.
The first electric street-railway was built by Frank J.
Sprague at Richmond.
1889.
Strike on New York street railroads, Jan. 28.
Department of Agriculture created, with Norman J. Cole-
man secretary, Feb. II.
Benjamin Harrison inaugurated, Mar. 4.
U. S. men-of-war Vandalia, Nipsic, and Trenton wrecked
at Apia, Samoa, Mar. 16.
Centennial of President Washington's inauguration cele-
brated at New York, Apr. 29.
Johnstown, Pa., inundated by bursting of a reservoir, May
31, 3000 lives lost.
Seattle, Wash., swept by a fire which destroyed $5,000,000
worth of property, June 6.
New York naval militia created, June 14.
North Dakota admitted to the Union, Nov. I.
South Dakota admitted to the Union, Nov. 2.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Montana admitted to the Union, Nov. 8.
Washington admitted to the Union, Nov. II.
Fire did $4,000,000 damage at Lynn, Mass., Nov. 26.
Jefferson Davis died at New Orleans, Dec. 6.
Tanks for the making of window glass introduced by J.
Chambers at Jeannette, Pa.
1890.
The United States recognized the Republic of Brazil, Jan. 29.
The Lenox Hill and Sixth National Bank, of New York,
suspended, Jan. 30.
The Centennial of the United States Supreme Court cele-
brated, Feb. 4.
President Harrison signed the World's Fair Bill, Apr. 25.
Idaho admitted to the Union, July 3.
Wyoming admitted to the Union, July n.
William Kemmler, the first murderer killed by electricity,
was executed at Auburn Prison, N. Y., Aug. 6.
Great strike on the New York Central Railroad, Aug. 8.
President Harrison signed the McKinley Tariff Bill, Oct. I.
Several heavy failures occurred in Wall Street, Nov. 10.
The Eleventh Census gave the population of the country as
62,662,250.
National Wholesale Saddlery Association of the United
States organized.
1891.
Proclamation of Reciprocity Agreement with Brazil, Feb. 5-
International Copyright bill passed, March 4.
Italy recalled Baron Fava owing to troubles over the New
Orleans race riots, March 31.
The centennial of the patent system was celebrated in
Washington by a Congress of Inventors, Apr. 8.
Treaty of Reciprocity with Spain, Apr. 20.
The first railroad passenger train ran to the summit of
Pike's Peak, June 30.
Commencement of rain-making experiments in Texas,
Aug. 10.
First armor-plate supplied to the government by the Beth-
lehem Iron Company and Carnegie, Phipps & Company.
1892.
Chilian outrages on American seamen, Jan. 18.
Constitutionality of the McKinley Tariff affirmed by the
United States Supreme Court, Feb. 29.
The Standard Oil Trust dissolved by consent of the share-
holders, March 21.
$3,000,000 cotton fire in New Orleans, Apr. 3.
Platinum discovered in South Dakota, Apr. 30.
Homestead Steel Works closed, June 30.
Attempted landing of a Pinkerton force precipitated the
bloody Homestead riots, July 6.
Work resumed at Homestead, Aug. 3.
Railroad strike at Buffalo called out the militia, Aug. 13.
The Atlantic liner Moravia arrived in New York with cholera
on board, Aug. 31.
Fire did $7,000,000 damage at Milwaukee, Wis., Oct. 28.
Discoveries of gold in Colorado, Dec. 21.
Long-distance telephone line between New York and Chi-
cago formally opened.
A Vauclain compound-locomotive attained a speed of 97
miles an hour, being one mile in 37 seconds.
1893.
News received of the Hawaiian revolution, Jan. 28.
Annexation of Hawaii recommended by President Harri-
son, Feb. 15.
The President raised the Stars and Stripes on the New
York of the new American line, Feb. 22.
Grover Cleveland inaugurated, March 4.
President Cleveland withdrew the Hawaiian treaty from
the Senate, March 9.
Fire did $4,500,000 damage in Boston, March 10.
The World's Fair opened at Chicago by President Cleve-
land, May I.
Locomotive No. 999, of the New York Central, covered one
mile in 32 seconds, May 10.
Chinese Exclusion Act confirmed, May 14.
Wide-spread distrust breaks out in a terrible financial panic,
June 20.
$8,000,000 Clearing House Certificates issued to give relief,
June 30.
Congress met in special session, Aug. 7.
The panic had passed, but confidence was not restored,
September.
Mayor Carter H. Harrison, of Chicago, assassinated, Oct. 28.
World's Fair closed, Oct. 30.
The Silver Repeal Bill passed, Nov. i.
The last outstanding Clearing House Loan Certificate
retired, Nov. I.
1894.
World's Fair Buildings burned with a loss of $2,000,000,
Jan. 8.
Decision of Court of Appeals allowed foreign corporations
to buy and sell New York real estate, Jan. 16.
$50,000,000 of 5 per cent, bonds issued, February ; second
issue of $50,000,000, November.
Coxey's Commonweal Army arrived in Washington, Apr. 29.
Boycott on the Pullman Works began the great Chicago
railroad strike, June 25.
The Hawaiian Republic proclaimed, July 4.
Chicago railroad strike ended, July 13.
Fire did $3,000,000 damage in Chicago, Aug. I.
The United States recognized the Hawaiian Republic,
Aug. 9.
The Wilson Tariff Bill passed, Aug. 27.
Launch and christening by Mrs. Grover Cleveland of steam-
ship St. Louis, largest vessel built in America, November 12.
1895.
The Bond Syndicate took an issue of $62,317,500 of gov-
ernment " coin " bonds, February.
The Empire State Express on the New York Central cov-
ered a distance of 436^ miles in 407% minutes, Sept. n.
The New York, New Haven and Hartford Railroad equipped
its Nantasket Beach branch to operate by electricity.
Steamship St. Paul, the second great American liner,
launched.
The Baldwin Locomotive Works consummated a working
agreement with the Westinghouse Electric and Manufacturing
Company for the production of electric equipment for railway
service.
Great activity in the iron and steel industries.
Message by President Cleveland to Congress on Venezuela,
emphasizing the Monroe Doctrine.
" Commercial Day," December 19, observed in New York,
and by commercial organizations generally throughout the
country. The American Commerce Banquet at Delmonico's,
New York.
The New York " Shipping and Commercial List and New
York Price Current " attains its hundredth year.
ONE HUNDRED YEARS OF
AMERICAN COMMERCE
CHAPTER I
AMERICAN BANKING
BANKS and banking, taken of themselves, con-
stitute a chapter of first importance in Amer-
ican records. To the national life the bank-
ing system is as the arterial system to the animal life.
Through it circulates the vitalizing current which
sustains the brain of business and statecraft, and
strengthens the arm of labor. It facilitates all com-
mercial transactions, and utilizes all the resources of
trade, gathering together the surplus capital of the
country, each depositor affording comparatively
little, but collectively producing a sum immense in
quantity, which can be loaned in portions to those
who may need it. No part of the uninvested capital
then remains unused ; what is not required by one
can be used by another.
In this country the existence of banks dates from
the time of the Revolutionary War. Since then
the methods pursued to attain the ends proper to the
banking function have been frequently and often
radically changed. They have always been, however,
more or less sound, considered with regard to their
adaptation to the times they served and the needs
they had to supply. In the history of their varia-
tions, therefore, we must see the effect of changed
conditions, rather than assume the downfall of early
error. One century ago the fiscal affairs of America
rested in the hands of a great national bank, the Bank
of the United States. The institution was modeled
almost exactly upon the plan of the Bank of England,
then, as now, one of the greatest financial factors in
the world. For forty years, with a brief lapse of be-
tween four and five years, just before and during the
War of 1812, this institution continued to be the
dominant power in the financial affairs of America.
Its passing away was marked by one of the bitterest
political fights known to history, waged by that
doughty old partisan, Andrew Jackson, and his suc-
cessor, Martin Van Buren. The next quarter of a
century saw the so-called State-bank system in full
control. Many of these State banks were, undoubt-
edly, as sound and solvent as any of the great insti-
tutions to-day. Others, it is equally true to say, were
not. The condition of affairs which resulted from
their operation, as a whole, however, can scarcely
be said to have been of the best. With no uniform
basis for their government, the prosperity of the time
had constantly to struggle under the disadvantage of
a demoralized currency, discounted in direct propor-
tion to the number of miles it traveled from home.
The Civil War, with its terrible demands upon the
country, found this system unable to respond as fully
as was needed, and a new system, the one under
which we have remained until to-day, was devised.
It avoids the centralization of power in any one great
chartered institution, and distributes it at large among
the banks of the country. It places the pledge of our
government behind every bank-note issued in the
United States. Around this national system has
grown up the financial world of to-day. Among
these facilities are banks of discount and deposit,
which furnish their conveniences to the mercantile
world; great private houses, with branches reaching
to every other country, and furnishing a medium of
foreign exchange which renders possible the extended
commercial enterprises which now characterize Amer-
ica; and savings institutions, trust companies, and
financial engines without number, all furnishing the
power to drive the great business machines of to-day.
The beginning of American banking is so indis-
solubly linked with the name and fame of Alexander
Hamilton, first Secretary of the Treasury of the United
States, that many have forgotten the fact that Robert
Morris, the Philadelphia merchant, was the first great
American banker. He it was who, in company with
George Clymer and a few other gentlemen, taking as
their sole security bills drawn in desperation by the
Continental Congress on John Jay, then in Spain ne-
gotiating a loan, established on their own personal
ONE HUNDRED YEARS OF AMERICAN COMMERCE
credit in 1780 the Pennsylvania Bank, in Carpenters'
Hall, Philadelphia. This was the first bank es-
tablished in the United States. Its only object was
to aid, with all its resources, the government in
transporting and maintaining the army, then in the
most desperate need. This patriotic end it accom-
plished, and to its aid, given at a most critical time
in the national history, it is scarcely possible to as-
cribe too great an importance.
Robert Morris having been appointed Superin-
tendent of Finance, the Bank of Pennsylvania went
out of existence in the following year, and Congress,
acting by Mr. Morris's advice, granted in December
to him and his associates a charter for the Bank of
N orth America, and in January, 1781, the new bank be-
gan business in Philadelphia. Thomas Willing was its
first president, and there were twelve directors. While
this bank was, like its predecessor, designed to give
aid to the government, then in those desperate finan-
cial straits which marked the closing years of the
war, it was also intended to furnish its facilities to in-
dividuals and to carry on a general banking business.
Its capital was $400,000, and it was conducted on a
specie basis, its notes being declared legal tender. It
also secured a charter from the State of Pennsylva-
nia, and as it was the only bank in the country at that
time, it soon began to roll up large profits. The years
1783 and 1 7 84 saw this prosperous institution declar-
ing dividends of 14 per cent. Such success imme-
diately produced emulators, and a corporation was
formed to start a rival bank. Before its charter had
been secured, however, its leading projectors were
pacified by being allowed to obtain large blocks of
a new issue of $500,000 worth of stock. This pre-
served its field undivided, and its prosperity contin-
ued. In 1 787 it was rechartered by the Pennsylvania
legislature as a State bank, and with renewals from
time to time, has since continued.
New York, having seen the success of the Bank of
Pennsylvania, and her merchants, appreciating the
facilities afforded by such an institution, began agitat-
ing the question of the establishment of a bank in their
city. A number of prominent men assembled, and a
plan was proposed which was at once called by its
opponents the " land " bank. It provided for paying
in but a small proportion of the capital in specie, the
balance to be secured by land accepted at two thirds
of its appraised value, and against which notes, pay-
able in specie, could be issued for one third of its
value. Of this plan Chancellor Livingston was the
great supporter, and his influence had nearly carried
it through the legislature when it applied to be
chartered. Its adversaries, prominent among whom
was Alexander Hamilton, managed to defeat its
passage, however, and it was never revived. Much
more serious was the experience of a modified form
of " land " bank which convulsed the colony of
Massachusetts a number of years before, and was
finally established after the deposition of an opposing
governor. In a short time, however, the British
government dissolved it, and placed some severe re-
strictions upon banks in that particular colony.
The demand for a bank continued to be made
by the New York merchants, and on February 23,
1784, a call was issued for a meeting which was
held at the Merchants' Coffee House and General
Alexander MacDougal occupied the chair. It was
then decided to start a bank with a capital of
$500,000, either gold or silver, divided into 1000
shares. On March isth, 500 shares having been
taken, the stockholders organized by the election of
General MacDougal as president, and Samuel Frank-
lin, Robert Bowne, Comfort Sands, Alexander Ham-
ilton, Joshua Waddington, Thomas Randall, William
Maxwell, Nicholas Low, Daniel McCormick, Isaac
Roosevelt, John Vanderbilt, and Thomas B. Stough-
ton, as directors. William Seton was elected cash-
ier, and so unused were New York business men of
that day to banks and banking methods that Cash-
ier Seton was immediately sent to Philadelphia,
with letters of introduction to the Bank of North
America, to learn how such affairs were properly
conducted. The stockholders, in the interim, urged
on by the hopes of large profits, hastened all their
arrangements, and as a charter had not been se-
cured from the legislature, the bank started without
one, opening its doors June 9, 1784.
This bank, known as the Bank of New York, had
for its original location the old mansion of William
Walton, at No. 67 St. George's (now Franklin)
Square. Three stories high, and built of the old
yellow Holland brick with hewn stone lintels, this
ancient house, erected in 1752, remained standing
until 1 88 1.
But even at this early day, it appears, there were
many people who believed that banks were antago-
nistic to the interests of the community, and in 1785
and 1786, currency becoming scarce, a cry went up
that these institutions were hoarding specie, and in
some States, notably New York, where the feeling was
greatest, issues of paper money were put out by the
legislatures. Financial affairs were in this condition,
general confidence being shaken, when, the Con-
stitution having been adopted and General George
Washington elected to the presidency, Alexander
Hamilton, the first Secretary of the Treasury, came
ONE HUNDRED YEARS OF AMERICAN COMMERCE
forward with his famous financial policy. The na-
tion assumed and bonded the debt incurred by the
Continental Congress and the various colonies in
carrying on the war, and, going further, established
in 1791 the Bank of the United States. This bank,
which was chartered by Congress for twenty years,
was established to act as the fiscal agent of the
government and to be the depository for the public
moneys. It was also authorized to issue its notes,
payable in specie, and was made in every way possi-
ble the agent of the United States Treasury and the
great power in the financial affairs of the country.
Its capital was placed at $10,000,000, divided into
25,000 shares of $400 each, payable one fourth in
specie and three fourths in 6 per cent, stocks of the
United States. It was allowed to hold property of
all kinds up to the value of $15,000,000, inclusive
of its capital stock, and further to establish branch
banks in the various cities. In accordance with
this last provision it at once opened in New York a
branch known as an office of discount and deposit.
The prosperity of the Bank of the United States be-
gan at once, and during its whole career it averaged
annual dividends of 8 and 10 per cent.
The influence of Hamilton's policy was immedi-
ately felt, and prosperity speedily returned. The
spirit of speculation was let loose in the land and
a stringency resulted in the currency that seemed
likely to have serious consequences, and was only
averted by Alexander Hamilton and the United
States Treasury coming three times to the relief of
the straitened business community. After this little
set-back, which was of short duration, business con-
tinued steadily to improve. In New York, where
political influence had prevented the granting of
charters for new banks, a corporation known as the
Manhattan Company, and headed by Aaron Burr,
succeeded in 1799 in getting a charter, ostensibly to
provide New York with pure water. The capital
of the company was placed at $2,000,000, and, un-
noticed by the politicians in power, the charter con-
tained a clause which, after reciting that the capital
was to be devoted to establishing a water-supply,
declared that the surplus should be " employed in
the purchase of public or other stocks or any other
moneyed transactions or operations not inconsistent
with the laws and constitution of the State of New
York." It is needless to say that with such a clause
in its charter $500,000 was quickly found, and the
money, after fulfilling the object for which the char-
ter was granted, was devoted to the establishment of
a new bank. In 1803 no less than forty banks were
open and doing business throughout the country.
The expiration in 1811 of the charter of the Bank
of the United States, which had failed of renewal,
followed by the war declared in 1812 against Eng-
land, placed the country in a most unsatisfactory
position. Having little or no credit, it found itself
forced to fall back in great measure on the banks.
These were all institutions under State charters, no
less than 123 new ones having been created in the
four years following the dosing of the United States
Bank. These had an aggregate capital of $40,000,-
ooo and emitted notes to the face value of $200,-
000,000, a large portion of which, in the Middle
States especially, were issued as loans to the gov-
ernment.
As might, perhaps, have been expected in view of
the prostration of the public credit, the strain upon
the banks speedily became too great, and Septem-
ber i, 1814, specie payment was suspended. It
was during this period that the private banker first
assumed the importance in the commercial world
that he has to-day. Stephen Girard, the great
Philadelphia merchant, purchased in 1811 the build-
ing and stock of the late Bank of the United States,
and then began carrying on a banking business him-
self, with a capital of $1,200,000, which he shortly
increased to $4,000,000. While private bankers
had, of course, existed, there had been none in
America on such a grand scale, and it marks the
beginning of the era of great houses whose names
are associated with money the world over. Girard's
patriotism was, too, quite equal to his sagacity, and
in the closing years of the war, after the Treasury had
vainly tried to float a loan of $5,000,000, but had
only been able to secure a total subscription of $20,-
ooo, Girard took the whole amount. The assist-
ance thus furnished undoubtedly had its effect in
bringing about the successful peace. This was ac-
complished in December, 1814, and one of the acts
of Congress soon after was to grant a new charter
for twenty years to the Bank of the United States.
This institution accordingly resumed business in
January, 1817, and speedily became one of the
greatest financial institutions in the world. Its capi-
tal was fixed at $35,000,000, divided into 350,000
shares. Of this, $7,000,000 was held by the United
States. Of the remainder a great amount, as much as
84,000 shares at one time, was held in foreign coun-
tries, and the stock was quoted at 50 per cent, above
par. This bank issued notes, none being less than
five dollars, payable in specie on demand, and did
a general banking business, discounting notes and
making advances on bullion at the rate of 6 per
cent.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Its government was entrusted to twenty-five di-
rectors, five of whom, being holders of stock, were
appointed by the President of the United States.
From these directors was chosen a board of seven
which, headed by the president, had active control
of all its operations. It rapidly established branch
offices in all the cities of any importance, and in
1830 there were twenty-seven of these branch banks
in existence and doing a thriving business.
One of the first effects of the rechartering of the
Bank of the United States was to force the large num-
ber of State banks either to resume specie payments
or to wind up their affairs. Many were forced to the
latter alternative, and of the 446 State banks then ex-
isting, there were 165, including those ruined by the
war, which went out of business. From the aggre-
gate State banking capital of $90,000,000, in the
whole country, these suspensions withdrew $30,000,-
ooo. Of this amount, $5,000,000 was an actual
loss and was distributed between the government
and individual holders. For some time after this
the State banks can scarcely be said to have in-
creased, although they continued in existence and
legislative provision for them and their government
was made in many of the States.
In New York a general banking law, known as
the Safety Fund Act, was passed in April, 1829.
Under it banks were allowed to issue circulating
notes up to twice the amount of their capital, and
their loans were limited to two and a half times their
capital. A guarantee fund was created by the an-
nual payment of one half of one per cent, on the
capital stock to the State Treasurer. This payment
was only to continue until three per cent, had been
paid, and the fund thus created was to go to mak-
ing good the payment of the circulation and other
debts of any such banks as might become insolvent.
Other States had different regulations, not all of
them as wise as New York, perhaps, but each one
establishing certain precautions.
Coincident almost with the rechartering of the
United States Bank was the introduction of banks
for savings. These institutions are a branch of bank-
ing that, while deserving an extended mention, must
fall, under the lines of this article, within a brief
space. Benevolent in conception and designed to
afford the poor an opportunity to save in small
amounts, their plan is simply one of deposit, on
which the bank, as borrower, pays to the depositors
a fair rate of interest, and with the advantage of a
large capital, the aggregate of many small deposits,
makes advantageous investments unattainable to
small capitals such as the individual depositor could
control. They differ from regular banks because
of their philanthropic purposes, in being exempt
from taxation, and in not loaning or investing their
funds on personal security.
The first American savings bank was opened in
Philadelphia in 1816 and was called the Philadel-
phia Savings Fund Society. The same year one
was established in Boston, New York following in
1819, and in 1820 there were ten in the country,
having 8635 depositors and $1,138,570 in deposits.
They have increased with the country, and in 1 890
there were 921 with 4,258,893 depositors, and hav-
ing placed to their credit the enormous sum of
$1,524,844,500.
For many years the Bank of the United States
continued to grow more and more powerful. Its
resources increased, its business extended, and it be-
came a factor in the industrial and commercial life
of the nation, such as had not been dreamed possi-
ble. On the first of November, 1832, it was accord-
ing to its own showing one of the richest institutions
in the world. Its total liabilities, including the
notes it had in circulation, its deposits, and the debts
owing to holders of public funds, were $37,296,-
950.20; while its assets, including specie, cash in
Europe, and debts from industrial and banking
companies, were $79,593,870.97. This left the
enormous surplus of $42,296,920.77. It seemed as
stable as any institution of its kind in the world, not
excepting the famous Bank of England, and it
afforded a currency for general circulation that was
freely accepted everywhere. But the great power
of the Bank of the United States had made it ene-
mies, and a demand arose, upon General Jackson's
election to the presidency, that it should not be re-
chartered. The officers were chiefly of the party
opposed to him. Immediately upon entering office
the President announced that he would refuse to
sign any bill extending the life of the Bank of the
United States. He declared that it was dangerous
to the liberties of the United States, and that it was
unconstitutional. Shortly after this, the public funds
were withdrawn from the bank. So great had been
the prosperity of the country during the twenty
years this bank had operated, however, that the war
debt of the nation had been completely paid and a
surplus of $40,000,000 remained. This surplus,
upon its withdrawal from the Bank of the United
States, Congress voted to distribute among the States.
The blow dealt to the great bank by this withdrawal
was a terrible one, and with the loss of its charter
impending and the unrelenting enmity of the Admin-
istration, it was thought it must close. Nicholas
LEVJ P. MORTON.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Biddle, its president, determined not to give up,
however, and on February 18, 1836, he stole a march
on President Jackson by having it incorporated by
the State legislature as the Pennsylvania Bank of
the United States. In this form, as a State bank, it
continued to exist, but it never assumed the impor-
tance it had had before. It finally closed in 1840.
All this, however, took years to work itself out,
and in the meantime much was happening in the
financial world. The demise of the Bank of the
United States as a national institution left the field to
the banks chartered by the States. These at once
made the most of their opportunity ; and helped, as
they were, by receiving on deposit large sums of the
distributed public moneys, they increased rapidly,
and 1837 saw 634 of them in the country, having an
aggregate capital of $291,000,000. With the great
prosperity which, in the shape of State bank-notes,
came over the country with these financial changes,
arose also a spirit of the wildest speculation. Public
lands were the chosen field of the operators, and the
dealing ran into millions. It was all based, though,
on the current notes, many of these being issued by
" wildcat " banks, and worthless. Trouble seemed
certain, and President Jackson, in trying to establish
our finances on a sound basis, issued his famous Spe-
cie Circular, ordering all agents to accept nothing but
specie in payment for the public lands. This pre-
cipitated the crash. The banks were called upon at
once to redeem all their circulation in specie, and
after vainly attempting to do so, they suspended pay-
ment on May 9, 1837. Six months later, no relief
having come, a meeting of 136 delegates from banks
all over the country was held in New York to con-
sider whether means could be devised for resumption,
but no relief at that time was found possible.
It was during this unlucky year that, at President
Van Buren's suggestion, the sub-treasury plan as it
now exists was brought forward as a measure to pre-
vent the loss of the public moneys by the failure of
banks. It was defeated at this time, but three years
later passed, only to be repealed in the succeeding
year. Five years afterward, however, it was finally
reenacted.
In May, 1838, the New York banks resumed pay-
ment. They were followed in August by the Phila-
delphia and Southern banks, but these only held out
for a little over a year, and on September 9, 1839,
suspended again. Despite all the trouble in which
the banks were involved, they increased almost as
rapidly as before. In 1840 their number had swelled
to 901, with a total capital of $358,000,000. The
system of State banks, nevertheless, had grown un-
popular, and the suspensions of 1837 and 1839 and
the continuing uncertainty and lack of confidence
caused a strong demand for a return to the old na-
tional banking system. At this time the presidential
campaign in which General Harrison was elected
came on. One of the great issues on which this cam-
paign was fought and won was that a new national
bank should be established at once, and immediately
upon his inauguration General Harrison called a spe-
cial session of Congress to consider the matter. But he
was destined never to carry out the wishes of his party,
for he died before Congress had convened, and his
successor, President Tyler, twice vetoed the measure
when it was passed and presented to him, — as a bill
to establish a " Financial Agent of the Government"
"to act for it in all fiscal matters, and to facilitate
mercantile exchanges throughout the country." This
action on the part of the President settled the ques-
tion of banks acting under the authority of the United
States for many years thereafter, and until 1864 all
banks of issue and deposit were operated under char-
ters obtained in their various States. The effects of
the lack of uniformity in the system were soon visible,
not only in the stringency from 1840 to 1843, ar>d tne
later suspension of 1857, but in the generally demor-
alized currency, which, with the exception of specie,
had its standard of par only in its own neighborhood,
and could be passed at any considerable distance
only at a great discount. The farther away it went
from the bank of issue the less it was worth. The
State banks continued to put forth as many notes as
they could pass. Many of these banks were perfectly
solvent institutions, and were wisely conducted upon
a sound basis; but truth compels the statement that
many others were not, while at the root of the whole
system was the lack of an essential uniformity. Bank
failures were very common. It is worthy of mention
here that throughout all the vexations and inconve-
niences caused by the State banks in their day, New
England was little affected. What was known as the
Suffolk Bank System was there in use; by this the
Suffolk Bank of Boston redeemed and collected for
all New England banks, each of which had a stipu-
lated deposit, the whole aggregating $300,000, with
the Suffolk Bank for this purpose.
The stringency of 1840-43 having been safely
tided over by the banks, better times appeared, and
a still further impetus was given to our national pros-
perity in 1849 by the discovery of gold in California,
developing great activity both industrially and com-
mercially. In the next four or five years the one
event which stands out conspicuously in American
banking was the establishment on October n, 1853,
ONE HUNDRED YEARS OF AMERICAN COMMERCE
of the New York Clearing House Association. This
association, of the utmost importance in expediting
and giving security to the great banking interests of
the country, began with a membership of fifty-two
banks. Its system, so simple and yet so effective
that it seems almost impossible its origination and es-
tablishment could have been so long delayed, is that
by which each bank, instead of presenting separately
to the other banks for payment such of their checks
as it holds and in its turn paying cash to all the other
banks for such of its own checks as they hold, sends
them all at a certain hour to the Clearing House.
Here all the checks are assorted, a clerk being pres-
ent from each bank having a membership; andthesum
total of the checks each bank presents, compared with
the sum total of the checks presented against it, gives
a balance for which the Clearing House draws its
check, and transactions that would have taken many
clerks and messengers a whole day to complete,
are finished in an hour or a little more. In addition
to the convenience of this system, its beneficial effect
in economizing currency is immense. When it is re-
membered that the great banking interests which
center in New York have transactions daily involv-
ing exchangesof from $100,000,000 to $200,000,000,
it will be readily understood what a vast loss such an
amount of idle money would entail under the old
system of separate clearance payments. The Clear-
ing House, with its system of balances, is able to
settle it all by the use of from 3 j£ to 4 per cent, of
the total currency amount involved.
In addition to these advantages, the Clearing
House is an assurance of protection for its mem-
bers, and in its more extended operations of issuing
loan certificates at critical times has been a bulwark
of safety to the banking interests of the whole coun-
try. By its help, at the outbreak of the Civil War,
the New York banks were enabled to come instantly
to the assistance of the government with large
sums, which they could scarcely have commanded
otherwise; and later, in the panics of 1873 and 1893,
the issuance of $25,000,000 in loan certificates on
the first occasion, and nearly $50,000,000 on the
second, again did much toward enabling the banks
to withstand the terrible pressure of those times.
Between these years the average daily exchanges
of the Clearing House were $105,964,277 and the
average daily balances $3,939,265. At present
sixty-six banks are members of the Clearing House
Association. Besides these, eighty-one other banks
and trust companies which are not members are
cleared here through the banks which belong to the
association. A sixty-seventh member of the Clear-
ing House Association is the Assistant Treasurer of
the United States, at the sub-treasury in New York.
Almost 90 per cent, of the government expendi-
tures being made in New York by check, the mem-
bership of the Assistant Treasurer greatly facilitates
clearance.
The advantages of the clearing-house system were
immediately recognized when the New York asso-
ciation started, and Boston, Philadelphia, Chicago,
St. Louis, and other cities soon adopted it.
Returning to 1853, the banking interests of the
country continued much in the same condition, but
trouble was already brewing from over-speculation,
and in 1857 the great financial and industrial de-
pression, which was fortunately as short as it was
sharp, struck the country. The great storm broke
on August 24th of that year, when the Ohio Life and
Trust Company suspended with liabilities of $7,-
000,000. It was a terrible failure, and on September
25th and 2 6th the Philadelphia banks were forced
to suspend ; a general suspension in Virginia, Mary-
land, Rhode Island, and the District of Columbia
soon following. The trouble increased in New
York, and a run on the banks threatening serious
consequences, the legislature on October i4th au-
thorized a suspension of specie payments for one
year. The banks accordingly closed, but on Decem-
ber 24th, after only two months, the city banks re-
sumed. The Massachusetts banks also suspended,
and the panic became general in New England,
factories being shut down, banks closed, and troops
held in readiness to suppress anticipated riots among
the great crowds who were thrown out of work. For-
tunately the trouble did not last long, but while it
existed there were 5123 failures, with total liabilities
of $291,750,000.
The resumption of banks and renewal of business
was general early in the succeeding year, and that
the banks of the country suffered as little as any of
the great interests affected is shown by the fact that
in 1860, one year prior to the long suspension of
specie payments caused by the war, there were in
the country 1562 banks, with an aggregate capital
of $422,000,000 and a circulation of about $207,-
000,000. They held in specie at the time $83,594,-
537, and were credited with deposits of $254,000,000.
During the next four years the part played by the
banks was loyal and patriotic, but the history of
that time with its government issues of " legal ten-
ders" comes more properly within the domain of
national finance. The national banking law, which
regulates the banks to-day, was passed June 3, 1864.
Its provisions are simple and eminently secure, and
ONE HUNDRED YEARS OF AMERICAN COMMERCE
in their operation have proved most satisfactory.
They require a company of five persons or more
and a fully paid-up capital. As a security for their
notes of issue they are obliged to hold the govern-
ment's pledge in the form of United States bonds,
on which they are allowed circulation by the Comp-
troller of the Currency up to 90 per cent of their
par value. Shortly after this law was passed, Con-
gress placed a prohibitive tax of 10 per cent, on the
circulating notes of the State banks, so that for the
first time since 1836 the currency of the country re-
turned to the original basis of the national credit,
where it has since remained.
The national banking law had no sooner passed
than many of the old State banks began changing
to the new system. While the war lasted the num-
ber of the national banks was about 500. Those
that remained under the old State charters contin-
ued to do, as they are doing to-day, a general bank-
ing business of discount, loan, and deposit, but the
circulation of their notes became impossible owing
to the tax. When the national banks were first or-
ganized Congress had provided that the total cir-
culation to be allotted them by the Comptroller of
the Currency should not exceed $300,000,000. So
rapid was their increase, however, that four years
later the full amount of these notes had been issued,
and there were 1629 national banks with a paid-in
capital of $426,189,111. Of these banks Massa-
chusetts had 207; New York, 299; Pennsylvania,
197; and Ohio, 133. Two years later, inconven-
ience being experienced because the limit of circu-
lation had been reached, Congress authorized an
extra issue of $54,000,000, which was almost imme-
diately taken up.
The following year (1873) saw the disastrous ordeal
of panic and distress through which it was inevitable
the nation should pass on its return from the infla-
tion caused by the great war loans to the sound and
normal basis of peaceful prosperity. It was passed
without wreck, although commercial and financial
interests suffered heavily. In 1875 Congress re-
moved all restrictions upon the total amount of
notes the national banks might issue. It also voted
the resumption of specie payment, which had been
suspended since 1861, and decreed that it should
take place January i, 1879. This resumption, it
may be said, to the undying credit of the American
nation, was accomplished without the slightest dis-
turbance of business. Since then, the number of na-
tional banks in the country has increased steadily
each year. With 2047 banks, having an aggregate
capital of $497,864,833 and a total surplus of $134,-
123,649 in 1875, the next ten years showed, in 1885,
the existence of 2665, with capital amounting to
$524,599>6°2 and a surplus of $146,903495, mak-
ing an increase of 618 banks and a gain of $26,734,-
769 capital and $12,779,846 surplus. Still growing
and prosperous, the country continued to call for the
further extension of the banks with their facilities and
assistance, and in 1892 their number had become
3701, having an aggregate capital of $679,076,650
and a surplus of $237,761,865. These banks in
their average daily deposits took over $300,000,000,
which shows the enormous part they play in the
business world. Of this, about 90 per cent, is in the
form of the almost universal check.
In this year (1892) came upon the country the
beginning of the depression of business and financial
stringency that is now so happily showing signs of
abatement. It came more gradually than such
crises usually come and has been more persistent
Without actual panic the country verged perilously
near to disaster. The money-broker, who had almost
disappeared since the days of the war, reappeared
and secured premium for currency of any sort. The
banks had very little money of any kind, and for a
time payments were almost wholly in certified checks.
This showed that the trouble was not really organic,
and vast sums of idle money, hoarded and withdrawn
from circulation, further attested that the country
was not impoverished. But confidence was lacking,
and it operated as a check on enterprise which, re-
acting industrially as it always does, reached all
classes and caused much suffering. It also gave
rise to the great danger of a run being commenced
on the savings-banks. In the West, indeed, this did
happen; and many perfectly solvent institutions were
forced to the wall, being unable to realize quickly
enough on their securities to meet demands. In
New York, when the trouble became threatening,
and a rush of eager, excited depositors was to be
expected at almost any moment, the savings-bank
officials met, and taking advantage of the law, de-
clined to pay any accounts without three months'
notice. This saved the banks, but it was the nearest
approach to suspension that had been known since
i873-
The causes of the trouble have been matter for
much discussion and difference of opinion during
the past two years ; and a belief that its roots lay in
certain fallacies of national finance has caused action
by Congress, which has undoubtedly been beneficial
in its effect. Still, it is questionable whether the true
seat of the difficulty has been, or will be, reached by
any of these measures or plans of alleviation. An
ONE HUNDRED YEARS OF AMERICAN COMMERCE
overreaching speculation, which had locked up re-
sources that should have been available, coupled
with great uncertainty and some apprehension, per-
haps owing to political events and the commercial
and industrial changes they might be expected to
bring with them, had much to do with it. To-day,
it is pleasant to believe we have passed beyond it.
In this brief resume of a century of banking in
America, the vastness of the present interests has
been already foreshadowed. How enormous these
interests are and of how general usefulness, words
alone can convey no adequate idea. In figures only
can expression be found for the financial magnitudes
that make up the American banking interests of to-
day. From the $400,000 capital represented by
Robert Morris's bank in Philadelphia a little over
100 years ago, the aggregate capital of the banks
of the United States is now, according to the
latest available statistics, the tremendous sum of
$1,069,826,555, while one person in every seven or
eight in the whole country patronizes the banks as
a depositor and thus gains the privilege of their con-
veniences and economy. Against the above aggre-
gate of capital the banks hold aggregate resources
amounting to $7,342,397,052, and of the 12,000
banks in existence, exclusive of loan and trust com-
panies, in the year ending July, 1894, only seventy-
nine failures occurred. The solvency of the system
is well evidenced in this, and safeguarded as the
banks are by Federal and State legislation, with reg-
ular examinations by experts and sworn reports from
officials, it is fair to say that no community enjoys
greater security for its funds of deposit or exchange.
The very foundation of the American system for the
past thirty years has been the national bank, which
has opened its doors in nearly every town and hamlet
of the country where the common business of life is
transacted. It is a well- organized, carefully super-
vised, uniform system, which renders its benefits to
the individual directly and indirectly, as well as in
the revenue it affords the government. The latest
statistics give the number of national banks in the
country, October 31, 1894, as 3756, in which there
were 287,842 shareholders. Their aggregate capital
was $672,671,365, and their total surplus and un-
divided profits $334,121,082. Of these banks and
their capital, Pennsylvania led with 406 within her
borders, but her capitalization was but $74,168,390,
or less than that of New York with 334 banks and
$87.346,o6o capital, or than Massachusetts with 267
banks and $97,992,500. In the importance of its
national banks Ohio ranks fourth, with 246 institu-
tions having a capital of $45,240,100.
The total resources of the national banks on
October 2, 1894, were $3,473,922,055, and on Oc-
tober 3151 of the same year they had a total cir-
culation of $207,472,603 outstanding, as security for
which there were United States bonds on deposit to
the value of $199,706,200, and $28,071,239 lawful
money reserved on deposit to redeem circulation.
Their total loans and discounts were $2,007,122,-
191. In individual deposits the national banks
held on July 18, 1894, $1,647,017,129, and the
number of depositors was given as 1,929,340.
Under the latest statement of the condition of the
national banks, based on Comptroller Eckels's call
of July nth last, the figures show the aggregate of
resources and liabilities to have been $3,410,002,-
591 each. The whole number of national banks
was 3715.
As the national banks do not usually pay interest
on current balances, the fact that they are utilized as
banks of deposit to such a great extent shows the
appreciation in which the facilities afforded by them
for the transaction of business are held by the public
at large. Since the national banking system started,
upward of thirty years ago, the aid rendered through
it to the business world in carrying on its undertak-
ings has come to be fully recognized. The ruinous
rates of exchange prevailing under the old State-
bank system, prior to the war, are happily forgotten.
A check or draft can be bought from a bank
in New Orleans or San Francisco, drawn on its
New York correspondent, which will cost but the
smallest fraction of i per cent., or nothing at all, ac-
cording to the time of year and the direction in
which money is moving. For this same exchange
in 1859 the average rate was from i to \y2 per
cent., a tax upon the extension of business that
could not be borne in the present era of close
competition and narrow margins. Again, on the
total issue of about $200,000,000 of State bank-
notes in circulation prior to 1 860, a loss of from i per
cent, to 10 per cent, was entailed upon the holders
in any but the most restricted local transactions.
The advantage of replacing this circulation of dis-
count by a bank-note of uniform appearance, with
value fixed by law and ordered receivable at par
by every other bank in the system, was speedily
apparent. Furthermore, behind this uniformity lies
as security the quickest asset known, in the shape of
the United States bond fully covering the circula-
tion. Lawful money reserves further provide for the
redemption of circulating notes by these banks, and
a further reserve of deposit funds is ordered not
alone to secure depositors, but to still further hedge
ONE HUNDRED YEARS OF AMERICAN COMMERCE
about the reserves from possible impairment. In
all these ways, as well as by the reductions achieved
in rates of interest on loans and discounts, through
making available a largely increased capital, together
with lessened charges for collection made possible
by thorough organization, the people have directly
felt the benefits of improved banking methods. The
immense aggregate saving that is accomplished an-
nually along these lines can be gathered from the
fact that the clearing houses of the United States in
the single year of 1894 had clearings amounting to
over $45,000,000,000. With such great sums as
these, the smallest fractional charge possible becomes
heavy in the aggregate of transactions.
Of the relation of the national banks to the gov-
ernment there is but little dispute, and practically
but one opinion — that it is mutually beneficial.
Until March 3, 1883, both capital and deposits of
the national banks were taxed, and a further tax of
i per cent, on their circulation has been continued
from the first. From these three items of taxation,
the first two discontinued since 1883, an aggregate
amount of $144,660,952 had been yielded up to
July 1 8, 1894. In addition to this a conservative
estimate allows two fifths per cent, of revenue to
government on the national bank-note circulation,
through failures to redeem, which forces the banks
to make the full amount good before taking down
their deposit of United States bonds against which
the notes were issued.
As government depositories the national banks
further perform without charge duties that annually
save the government a great deal of money. Since
their inauguration the national banks have received
and stored in their vaults, at various times, $3,-
500,000,000, a service of great value. As a gov-
ernor of the national currency, operating to keep it
within controllable bounds, the national banks have
also been of the greatest assistance through the fa-
cilities they afford for the issue of instruments of
credit. The depositors in the national banks in
1894 outnumbered by 492,702 those in all the
State and private banks and loan and trust compa-
nies combined. As these, together with the national
banks, are utilized for checking against balances on
deposit rather than on those in banks for savings, it
is readily seen that the check is more largely em-
ployed at the national banks than at the other insti-
tutions, and inasmuch as at least 53 per cent, of
even the retail, and consequently more largely cash,
business of the country is transacted through the
medium of these small pieces of paper, while from
90 to 92 per cent, of the total business is thus
transacted, the important part they play will be like-
wise readily understood. The circulating medium
which, in a relative sense, these instruments of
credit supply, is perhaps a relief that should coun-
terbalance the complaint sometimes made regarding
the non-elasticity of issue under the present national
banking system. The average annual circulation
of the national banks between 1864 and 1894 was
$282,801,252, and the security of the notes is ab-
solute. A fluctuating market for bonds, against
which only a percentage of issue is allowed, has
undoubtedly made the lines of issue a little rigid,
but whether more so than is consistent with proper
precautions against possible manipulation or infla-
tion is a matter of extreme doubt. In fact, so far
as the system goes, it is the most perfect yet de-
vised, and in its operation has united uniformity
and stability with great facility of adaptation to
the constantly arising needs of the commercial and
financial interests.
On the national banks as a foundation, then, rests
the great superstructure of State, private, and sav-
ings-bank institutions, which, together with the
building and loan associations and the loan and
trust companies, constitute the remainder of the
money-managing world of this country. Of the
State banks there were in the United States 5033 on
July i, 1894, with an aggregate capital of $244,-
435,573 and resources amounting to $1,077,164,-
813. These banks held a surplus of $74,412,319.
The aggregate deposits were $658,107,494, and the
loans and discounts $665,988,823. Of United
States bonds these banks held but $604,055, as
against $10,662,200 held as investment by the na-
tional banks in addition to those deposited as secur-
ity. The business is profitable, but in the average
rather less so than that of the national banks. In
all the respects of general banking the State banks
transact the same kinds of business as the national
institutions, with the exception of the issuance of
circulating notes and the performance of those
functions of a governmental nature entailed by a
Federal charter.
The savings-banks in existence in July, 1894, were
1024 in number and in two classes, the mutual and
the stock. The latter class, of which there were
378, is of comparatively slight importance, not more
than 15 per cent, of the total figures of this branch
of banking being accredited to it. The capital
stock of the savings-banks of the country is about
$30,000,000, and their total resources are $1,980,-
744,189. The total amount of the deposits of indi-
vidual savings is $1,747,961,280, while about $30,.
10
ONE HUNDRED YEARS OF AMERICAN COMMERCE
000,000 more is held subject to check. The loans
of these banks amount to $1,026,622,425, of which
but a very small percentage relatively is secured on
other than real or intrinsic values.
The private banks, while neither so numerous nor
so heavily capitalized as the branches just men-
tioned, are a most potent factor in the commercial
world, by their especial prominence in the field of
foreign exchange. Their number in 1894 was 904,
and their total capital $26,652,167, with resources
of $105,379,051. Their surplus was placed at $6,-
005,126. The total of the loans and discounts was
$66,596,017, being $521,468 in excess of deposits.
The 224 loan and trust companies have a total
capitalization of $97,068,092 and a surplus of $57,-
663,599. Their total resources are $705,186,944, of
which loans and discounts are $374,421,713. With
the exception of the national and savings-banks,
these companies are the heaviest holders of United
States bonds among the banks, $13,449,411 being
accredited to them.
These five branches constitute, properly speaking,
the American banks. The building and loan as-
sociations are a species of cooperative banking, sav-
ings, and loan business, and, since they started in
1840, have grown rapidly. The statistics of 1894
gave 5838 of them in operation in the United
States. These wonderfully fast-spreading institu-
tions, deriving their capital from dues assessed on
their members and loaning it again to those giving
real security, had in 1894 the enormous sum of
$470,142,524 loaned on real estate alone. As
nearly all the loans are small in amount, being
simply enough to build a home for some compara-
tively poor person, the extent of this cooperative
undertaking is readily seen. In addition to these
loans on real estate, the associations have combined
resources sufficient to bring the total to $528,852,-
885, against which the heaviest items are $370,003,-
478 for dues paid in, and $35,775,366 on paid-up
stock.
Under these various heads, then, the banking in-
terests of America have grouped themselves in the
closing years of the nineteenth century. Beneath
them all are the broad, strong shoulders of the United
States government, bearing the final responsibility.
In the magnitude of the interests now represented in
the bank, all branches of industry and commercial
activity have at last come to see their share. In the
statistics of the annual report is told each year the
story of what America has achieved. In the exten-
sion of the bank to the remoter districts are carried
the same improvements to the every-day business
conditions of the community that the waterworks
brings to the sanitary conditions, or the public school
to the educational conditions. The bank is the agent
of civilization in its advance, whether in new coun-
tries or new fields of human endeavor. In the city it
is the great driving engine furnishing the power for
the machinery of affairs. The few brief figures of the
dry and business-like report, giving the resources of
the banks of the United States at $7,342,397,052,
tell most eloquently the commercial and industrial
achievements of the American people. To this suc-
cess the banking interests have contributed in no
scanty measure, and in it they, in common with all
the people, share to-day.
One very prominent feature in the history of bank-
ing has been the part played by private banks. It
has been seen that Stephen Girard was very import-
ant in the history of Philadelphia banking; and later,
Prime, Ward & King, bankers in New York, were
enabled to perform eminent services for their country
by loans negotiated in England. It was not, how-
ever, till about the time that the supply of gold from
California raised the prices of commodities all over
the globe, that many important American houses in
banking circles became prominent. Every great city
now has its private banks and bankers, who exercise
an important part in the economy and distribution of
wealth. They are able to handle business without
making it known to the whole world; they can af-
ford instant aid, without appeal to a board of direc-
tors, and everywhere they have proved of value.
Such names as those of the Drexels, the Morgans,
the Peabodys, and the Browns, will instantly occur
to every one as household words in the realm of
finance.
CHAPTER II
AMERICAN LABOR
A CORDING to the census of 1890, the total
number of people engaged in gainful oc-
cupations of all kinds was 22,735,661, of
which number 18,820,950 were males and 3,914,711
females. These figures include all engaged in any
gainful occupation, whether wage-earners or wage-
payers, whether employers or employees, and whether
engaged in manual or professional service. Elimi-
nating the wage-earners from this vast number, it
is found that they constituted 15,099,901, of which
number 11,802,540 were males and 3,297,361 were
females. If we classify this large number of wage-
earners, we find that 3,639,437 were engaged in
agriculture, fisheries, and mining; 4,153,385 in do-
mestic and personal service; 2,364,661 in trade and
transportation, and 4,942,418 in manufacturing and
mechanical industries. These statements are general,
and that more specific information may be at hand
the table on the next page has been made, giving
the number of males and females and the total
employed in specific occupations where more than
50,000 were engaged.
It would be exceedingly interesting if the growth
of this great body of working-people, numbering
over 15,000,000 at the present time, and the in-
fluences which have brought it into existence, could
be traced step by step during all the past 100 years.
It is impossible to give statistical statements of the
number of persons employed in any industry, or
otherwise, until the census of 1850, so we cannot
ascertain what the strength of the body of working-
people was in 1795. A fair calculation, based on
relative statistics at different periods, would indicate
that it was less than 500,000. Calculations in this
respect are not satisfactory, however, because labor
at the beginning of the loo-year period of which we
are treating was engaged in domestic manufactures,
of which no general account exists.
Four fifths of the population of the United States
at the close of the Revolutionary War was, according
to Mr. Bancroft, the historian, of English descent.
He states that in 1775 the colonies were inhabited
by persons one fifth of whom had for their mother
tongue some other language than the English. At
the present time careful consideration would indi-
cate that only about one half of our population can
claim the English as their mother tongue ; and yet,
during the first quarter of the present century, im-
migration could not have affected the nationality of
our working-people to any great extent, the accepted
estimate of the total number of immigrants between
1790 and 1819 being placed at 250,000. Prior to
this year (1819) no account was taken of the num-
ber of immigrants settling in the country, but since
that year the Federal government has taken account
of immigration. In no year between 1820 and 1824,
inclusive, did the number arriving in this country
reach 10,000. In 1833 the largest number in the
first third of the present century arrived, when
58,640 immigrants were registered. In only two
years, 1835 and 1838, has the number been less
than that just given, but with these two exceptions,
the annual immigration has been progressive, al-
though varying in volume. Great impetus was
given in the forties, the movement being accelerated
by the famine in Ireland in 1846 and 1847, and by
political causes in Germany. The total immigra-
tion since the Revolutionary War and up to July
31, 1895, was 17,731,678, while the foreign-bom
residing in this country at the census of 1890 was
9,249,547, being 14.77 Per cent, of the whole
population.
These large additions to our population must
have had a marked influence upon our industrial
conditions. In 1880 30.63 per cent, of all persons
engaged in manufacturing and mechanical indus-
tries were foreign-bom, while in 1890 31.56 per
cent, of those so engaged were bom abroad. In
12
ONE HUNDRED YEARS OF AMERICAN COMMERCE
1880 12.52 per cent, of the foreign-bom were en-
gaged in agriculture. It is seen, therefore, that the
manufacturing and mechanical industries have ab-
sorbed a much larger proportion of the new ele-
ment than has agriculture. The tendency of our
immigrants is to assimilate with our mechanical in-
dustries. This, of course, increases the supply of
labor in comparison to the demand, and may have
at times lowered wages and crippled the consuming
power of the whole body of the population. I am
satisfied that this has not been serious, and it may
have been imperceptible, for at the time of the ac-
celerated movement of immigration there was a vast
development of the railroad interests of the country,
which development could not have been carried on
so extensively and completely as it was without a
large body of common laborers. Immigration sup-
plied this labor, but it soon began to find its way
into organized industry. As the tendency of wages
has been constantly upward since the close of the
last century, it cannot be argued that the assimila-
tion of immigrants with our own native labor has
reduced wages, but it can be assumed — without the
possibility of proof, however — that such assimilation
may have retarded their increase beyond what was
experienced.
During the past few years the industrial depres-
sion has checked immigration, but with renewed
prosperity the movement may assume its normal
proportions. The character of immigration has
changed, and this change has not been for the bet-
ter. If immigration could be left entirely to natural
motives it is quite evident that the movement would
be retarded gradually, but it is stimulated by trans-
portation companies, in their desire to secure busi-
ness, to such an extent that a large body of objec-
tionable immigrants has been brought to the country
during the past ten years. When it is known that an
immigrant can be transported from Italy to Chicago
for less money than a first-class passenger can travel
from New York to Chicago it is not strange that
people flock to the United States ; and during this
past decade it is quite certain that labor in America
has suffered through this class of immigration, espe-
cially in mining districts, where wages have been
kept down and much distress has prevailed through
NUMBER OF MALE AND FEMALE WAGE-EARNERS REPORTED FOR OCCUPATIONS IN WHICH
50,000 OR OVER WERE EMPLOYED IN 1890
OCCUPATIONS.
MALES.
FEMALES.
TOTAL.
OCCUPATIONS.
MALES.
FEMALES
TOTAL.
Agriculture, Fisheries, and Min-
ing:
Agricultural laborers .
2.556,930
59,8»7
6^,829
208,330
140,906
70,047
82,i<;i
55,66o
I39,7i8
6,008
1,858,504
31,816
6,688
237,523
74,35°
169,704
131,602
492,852
368,265
54,005
79,459
48,446
55,875
205,931
381-312
447,085
•a
219
'33
687
2,825
147
86,8^2
54,8i3
216,627
51,402
1,205,876
283
4,875
27,772
64,048
237
24
4
2,909
o 29
58449
M38
3,004,015
60,150
65,857
208,549
141,039
70,734
84,976
55,807
139,765
92,810
1,913.317
248^43
58,090
' -443,399
74,633
'74,579
'59,374
556,900
368,502
54,029
79463
S',355
55,904
264,380
382,750
Telegraph and telephone oper
ators . . .
43,740
57,908
205,256
179,838
60,007
105,313
611,226
80,144
828
142,087
"76,937
61,006
158,874
5«,S6l
52,745
406
66,241
218,622
56,555
80,889
133,216
3,988
121,586
54,427
83,601
63,529
47.6^6
8474
2,273
59
33>6o9
194
129
191
92,9«4
288,155
2449
139
63
42
41,850
60,058
47
1,246
42
5,565
3°2
145,716
63,611
947
27,821
3,696
•j6.i7C
52,214
60,181
205,315
213.447
60,201
105,442
611,417
173,058
144,53°
177,076
61,069
158,916
93,4"
52,844
60,464
66,288
219,868
56,597
86,454
'33,5>8
149,704
185,197
55-374
111,422
67,225
8,1.071
Manufacturing and Mechan
tea I Industries:
Fishermen and oystermen. . . .
Lumbermen and raftsmen
Miners (coal)
Miners (not otherwise noted) .
Stock-raisers, herders and
drovers
Blacksmiths. . .
Boot and shoe makers and re-
Domestic and Personal Service:
Barbers and hair-dressers
Bartenders..
Brick and tile makers and terra-
cotta workers . . .
Butchers
Engineers and firemen (not
locomotive).
Carpenters and joiners
Cotton-mill operatives
Housekeepers and stewards . .
Laborers (not specified)
Launderers and laundresses. .
Nurses and midwives. . .
Dressmakers
Iron and steel workers
Machinists
Marble and stone cutters
Masons (brick and stone)
Mill and factory operatives
(not specified)
Servants
Watchmen, policemen, and de-
tectives
Trade and Transportation :
Agents (claim, commission,
real estate, insurance, etc.)
and collectors
Millers (flour and grist)
Milliners
Molders
Painters, glaziers, and var-
Bookkeepers and accountants.
Clerks and copyists
Draymen, hackmen, teamsters,
etc ...
Plumbers and gas and steam
fitters. . .
Printers, lithographers, and
Hostlers
Locomotive engineers and fire-
men.
Sawand planingmill employees
Seamstresses
Messengers and errand and
office boys. . . .
Tailors and tailoresses .
Tinners and tinware-makers.
Tobacco and cigar factory
Sailors ....
Salesmen and saleswomen.
Steam-railroad employees (not
Wood-workers (not otherwise
specified)
Woolen-mill operatives
CARROLL D. WRIGHT.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
13
the influx of very cheap foreign labor. It may be
said, with almost entire truthfulness, that the mining
industry is the one that has chiefly suffered in
various directions through foreign immigration.
In 1795 the labor of the country was, as already
stated, of a domestic character. Working-people
were engaged in agricultural pursuits, the fisheries,
and in the clearing of the forests, while a small per-
centage were engaged in what is known as domestic
manufacture and in commerce. The factory system,
dating from 1790 as the year of its birth, did not
become influential, so far as labor was concerned,
until after 1820. With the complete establishment
of textile factories, which occurred in 1813 at Wal-
tham, Mass., which town has the honor of erecting
the first complete factory in the world for the manu-
facture of finished cloth, in all the various processes,
from the raw material, labor began to find new ave-
nues of employment, and the young women of the
rural districts were induced to enter factories as
spinners and weavers. The growth of the textile
factory was rapid after 1820, both in the New Eng-
land and the Middle States. Fair wages and easy
work attracted the women of our own country and
English girls, and until Irish immigration com-
menced in earnest our textile factories were sup-
plied with English and American girls mostly, but
since their day there have been various changes.
The American and the English girl stepped out of
the factories and up into higher callings, and the
Irish operative stepped in. The Irish operative has
during the last twenty years or more, however, been
giving way gradually to the French-Canadian and
representatives of other nationalities. Practically
during the last fifty years there have been three
changes in nationalities in the operatives of our
textile works. With the adaptation of steam and
water-power in the textile industry other industries
grew. Of course, all manufacturing received a great
impetus during the Revolutionary War, when our
people were obliged to furnish their own supplies.
During the war the manufacturers extended their
enterprises and built mills — which are sometimes
called factories — but they were simple in their con-
struction. At the close of the war all these efforts
either ceased or the production of the mills was
greatly reduced.
The American nation found itself independent
politically of Great Britain, but still a subject of it in
respect to all its manufacturing interests. The Eng-
lish government sought to prevent the planting of
the factory system here, but through the ingenuity
and perseverance of Samuel Slater, who had served
his apprenticeship in the construction and manage-
ment of factory machinery in England, the system
was established in the United States; and then, as a
result of the earlier legislation after the adoption of
the Federal constitution, manufactures were stimu-
lated and the era of industrial progress in this coun-
try was opened. It can be said that the century
from 1795 to the present year has been one of con-
stant progress in the labor world, the factory sys-
tem gradually taking over to itself industry after
industry, until nearly everything is now produced
under it. The old domestic or hand system has
passed away almost entirely, and the re'gime of
invention and machinery holds full sway. These
great industrial changes have practically wrought a
revolution in this and other countries, bringing con-
stant employment to our working-people, and result-
ing in a tendency all through the century to the
increase of wages and a decrease in the cost of
production.
Along with this change in the method of produc-
tion, mining has been developed to an enormous
degree, until now the United States produces as
much iron as the mother country. The development
of iron-mining and the manufacture of iron have
brought into employment a vast body of skilled
workmen, and the ramifications of the industry still
greater forces. Our large towns and cities are, as a
rule, thoroughly equipped with sewers, and the
manufacture of pipes and mains for this purpose, as
well as the manufacture of gas-pipes and mains and
plumbing work generally, has been the result. These
latter changes have occurred within the last fifty
years.
The change in the system of work has practically
done away with apprenticeships. Manual training
and the work of trade schools are fitting boys and
young men for skilled work in a better way than did
the apprenticeship system, which was the universal
rule at the beginning of our century. With the es-
tablishment of the factory system apprenticeships
were less obligatory. By 1850 the resort to them was
waning, while since the vast development of the fac-
tory system, especially subsequent to the Civil War,
they have been still less prevalent. Another great
change which has come in the way of industry is the
employment of women. They were engaged only in
domestic labor, except in rare instances, in 1 795, but
now there are few occupations in which they are
not represented. The number grows from census to
census. This change was brought about by the
adoption of the factory system, under which women
found they could attend light-running machines with
14
ONE HUNDRED YEARS OF AMERICAN COMMERCE
skill and with fair remuneration. While their com-
pensation is exceedingly low now in almost all indus-
trial pursuits, yet it is something where nothing was
received before. They constitute a new economic
factor in industry, and being a new economic factor,
they cannot as yet hope to receive liberal wages. It
can hardly be said that they have displaced men, but
they have displaced boys and girls to a considerable
extent. The first tendency under the factory system
was to employ children, and the number constantly
employed increased from year to year, until during
the last fifteen or twenty years, when the number has
been rapidly on the decline. Public sentiment voiced
by legislation, as well as the economies of production,
is driving the children out of our factories : women
are taking their places. In some industries men have
taken the places of women, the change of the form of
work resulting in such displacement. Laundry work
is practically factory work now ; and the old domes-
tic hand-weavers, who were to a large extent women,
have seen their work transferred to the factory.
These industrial revolutions have carried with them
other changes, which perhaps are more ethical than
economical in their relations. For instance, under the
old system of labor, employers had a paternal rela-
tion to their employees, and even in the early cotton
mills in New England the paternal system of caring
for employees was adopted. This was chiefly notice-
able at Lowell, and later on also in Manchester,
Conn., under the Cheneys' administration of the silk-
works ; but as the factory system has spread this pa-
ternal care has been lessened, although during the
last few years there has been a great revival in the
discussion of the usefulness of such paternal over-
sight. The absolute necessity for the congregation
of great bodies of working-people in one locality is
everywhere stimulating the thought that there should
be some other rule than that of entire non-interference
with the welfare of employees. The public is consid-
ering this question, and great employers here and
there are trying the experiment of taking an interest
in the home welfare of their employees as well as in
their efficiency.
The changes in the industrial system have had
many ramifications. The labor movement in this
country, that is, the organized attempt of labor to
impress its aims upon the whole people, may be said
to have begun with the century that is now closing,
but it did not gain full headway until the nineteenth
century was fairly on its way. This is true, notwith-
standing the labor question has been present always
in the development of the world; but contempora-
neous with the development of the industries of the
United States the movement, as it is now known, has
taken place, and its speed has been accelerated as the
industrial development has progressed. Prior to
the establishment of the factory system there was lit-
tle organization. Here and there a club of skilled
workingmen existed. This was notably in the
Eastern and Middle States. Since 1825, however,
the movement has been rapid, and its results, while
not always satisfactory, are indicative of real pro-
gress. In the early years of the labor movement
many arguments were advanced against it, and the
attempt made to prevent workingmen from joining
in organization. The merchants and ship owners
of Boston, at a meeting held in the Exchange Cof-
fee Rooms on May 15, 1832, voted to discoun-
tenance and check what was called the unlaw-
ful combination formed to control the freedom of
individuals as to the hours of labor, and to thwart
and embarrass those by whom they were employed
and liberally paid. This meeting was emphatic in
its declaration that there was a pernicious and de-
moralizing tendency in combinations and an un-
reasonableness in any attempt made by organizations
to secure more favorable conditions of work. It was
held everywhere that labor ought always to be left
free to regulate itself, and that neither the employee
nor the employer should have the power to control
the other; and the old stock argument that organi-
zation would drive trade from the country was re-
sorted to then, as now, and a resolution was adopted
at the meeting referred to, that the members of it
would neither employ any journeyman who at the
time belonged to a labor combination nor give work
to any master mechanic who employed them while
they continued pledged to their associations. These
statements sound very much like those made at the
present time, and yet the story of labor organization —
its course, its successes, its failures, the philosophy un-
derlying it, and the influence it has exerted in many
directions — goes to prove that the world is growing
better, and that the condition of labor as it now exists
is a vast improvement upon its condition at any other
period. This might be proved by an exhaustive cita-
tion of wages and prices during the past 100 years,
were such citation necessary. It may, perhaps, be
well simply to say that wages, even during the past
half-century, have increased, on the whole, something
over sixty per cent., while the general course of prices
has been downward. This is true of other countries
in which machinery performs an important part in
production, but it is essentially true in America, for
here, with our vast resources, our peculiar systems of
education and of government, exerting great influence
ONE HUNDRED YEARS OF AMERICAN COMMERCE
upon the minds of all, wages are higher than in any
other country in the world. The standard of living
is necessarily higher, of course, and the workingman
finds that he is able not only to preserve his working
condition, but to participate in other things which
are essential to his spiritual development.
To-day organized labor has many defenders. It is
looked upon with disfavor in some quarters, but I
think, as a rule, employers are quite willing that their
employees should organize, for they have their own
organizations and do not feel like denying the right to
others. Of course, a very large proportion of the
working-people of this country are unorganized, and
I presume this is true of manufacturers and employ-
ers on their side ; but as the methods of production are
brought to a larger and grander scale, organization in
every direction will more and more prevail. At pres-
ent organized labor is estimated at 1,400,000. This
is the result of an estimate based on the claims of
different organizations. I am inclined to think it is
too liberal an estimate, and yet, placed in compari-
son with 15,000,000 wage-earners, it does not seem
large ; but, as a rule, organized labor is employed in
the manufacturing and mechanical industries, and in
this sense the percentage is high. The proportion of
organized manufacturers to the whole body is prob-
ably much larger.
As the labor movement has grown strikes have
become more frequent, and while undoubtedly the
era of strikes is passing away, yet it will be some
time before the downward scale is reached as to
numbers and importance. The great strikes in the
country have had a marked influence in many direc-
tions. They have excited working-people to under-
take other strikes; they have brought bitterness
between employer and employee, and yet on the
whole they are bringing a new line of thought to the
public mind, and their study will, I feel sure, result in
good to all classes. Strikes are teaching the public
its interests in industry as over against the personal
and selfish interests of the two parties immediately
involved.
The labor question has met with a great change as
a result of the Civil War. Our negro population has
lost some of the old occupations in which it was en-
gaged in the North half a century ago, but it is gain-
ing others. In the South the employment of the
negro is becoming more varied and his condition
more hopeful as one of pecuniary prosperity. Negro
labor is abundant, good, and steady in certain lines.
The question is often asked, whether the division of
employment lessens the quality of work. I do not
believe it does. The great principles of modern in-
dustry are association, concentration, and specializa-
tion. With the first the second is absolutely essential,
and the third is the result of concentration. If these
things lessen the quality of the work, then the op-
posite must be true — that without them quality is im-
proved. This carries the argument too far. If there
is much truth in it, then the simplest, humblest kind of
work is best for the worker. Sawing wood and pav-
ing streets, the most ordinary manual toil, are better
for the worker than the employment of his intellect
in tending a machine. A study of all the facts leads
to the positive conclusion that the division of employ-
ment does not lessen the quality of the worker when
considered as a man.
Working-people have experimented with coopera-
tion, profit-sharing schemes, and other methods of
increasing wages. These experiments have in many
instances proved failures; in others, successes.
They are likely to do some good, but it will be a
long time before the moral character of the men in-
volved will permit successful management of co-
operative schemes. The principle is right The
cooperative principle is that of our modem system
of industry. Pure cooperation, probably, cannot
succeed, from an economic point of view, but the
cooperative spirit can prevail to a higher degree
than it now does; and all these things — combinations
of workingmen, public sentiment, economic condi-
tions (and the latter more largely than any other) —
have reduced the hours of labor from eleven, twelve,
and thirteen per day to eight, nine, and ten per day.
These changes, however, came gradually, and as the
result of improved methods of production.
After the economic changes were assured law
stepped in and made the custom the public voice.
The first ten-hour law in this country, however, was
not passed until 1874, when the State of Massachu-
setts provided that women and children should not
be employed over ten hours a day in the textile fac-
tories of the State. Another specific change which
has come is the frequent payment of employees for
their services. The method in former times was to
pay the working-people part in cash and part in
goods, and settlements were made at long intervals.
Now everywhere, with a few exceptions in the West,
where to some extent the truck system still prevails,
cash payments at short intervals are the rule. This
change has been brought about both by public senti-
ment and by statutory enactments.
One of the greatest changes which has been
wrought by the new system has come through cor-
porations. When the century began, the working-
man and his employer were practically associated ;
ONE HUNDRED YEARS OF AMERICAN COMMERCE
they worked side by side; they had a personal ac-
quaintance each with the other, and their interests
were, to a large extent, practically the same. With
the establishment of the factory system there came
the necessity of using large capital, more than one
man or a firm of men contributing ; so the corpora-
tion became a necessary factor in the development
of industry. Many small stockholders aggregated
their means and made a large capital. The inter-
ests of the stockholders had to be administered by
a corporation government, and this corporation gov-
ernment employed men and women. The ethical
relations were changed at once. As a great capital
is now the result of the aggregation of small savings
in many respects — although in some instances the
stockholders are heavy capitalists — the organization
of labor has grown on the ground that one organi-
zation should deal with another; that if the stock-
holders lose their personality and are represented by
a manager, the large body of working-people lose
their personality, and their interests should be repre-
sented by a manager or a committee. One of the
vital changes resulting from this growth of corpora-
tions is the liability of the employer to the employee
for damages received while in the employment of
the corporation. The old common-law rule relating
to the liability of employers for accidents occurring
to their employees is that a workman cannot recover
damages for injuries received through the carelessness
or negligence of a co-employee, although a stranger
may recover for an injury following the same care-
lessness or negligence. This rule grew up under the
domestic system,when employer and employee worked
side by side, and each knew the character and skill
of the other, and when several workmen working
together were supposed to be acquainted with the
risks of their occupation as well as with the character
and skill of their co-employees. But when expanded
methods are introduced this old rule becomes some-
what ridiculous; for co-employees maybe a brakeman
and a switch-tender, and under this rule a brake-
man on a train running, perhaps, 500 miles, could
secure no damages whatever from a railroad cor-
poration employing him, in consequence of any in-
juries received through the carelessness or negligence
of a switchman along any part of the line, although
the brakeman knew nothing of the switchman, had
no knowledge of his skill or capacity when he en-
gaged with the company, and in no sense of the
word, so far as risk and association of service were
concerned, could be considered the co-employee of
the switchman. Yet, as the common-law rule grew
up before great industrial enterprises were estab-
lished, courts have projected it, and have ruled that
in such a case as that just mentioned the switchman
and brakeman were co-employees, and that therefore
the employer could not be held liable. This rule is
being broken down by statutory restrictions in differ-
ent parts of the world, although it has not generally
been modified, and still holds good in many States.
There are very many other points where changes
in relationship have been made by the change in
system. Looking the field over broadly, the con-
clusion must be reached that on the whole the work-
ing-people have been gainers during the progress of
the past century — gainers not only in wages, both
real and nominal, but in their relations to society ; so
with the facts briefly stated we may well consider
such relations and the general philosophy of Ameri-
can labor conditions.
De Tocqueville, when studying this country, ob-
served that amongst a democratic people where
there is no hereditary wealth every man works, or
has worked, to earn a living, or is the son of parents
who have worked, and that in such a community
the notion of labor is presented to the mind on every
side as the necessary, natural, and honest condition
of human existence ; that in America even a wealthy
man thinks he owes it to public opinion to devote
his leisure to some kind of industrial or commercial
pursuit, or to public business, and would think him-
self in bad repute if he employed his life solely in
living.
These reflections of De Tocqueville, conveying
the idea of life or of actual living, are stimulated by
all the elements which make up the essential char-
acteristics of this period. Nearly all the great for-
tunes, as they now exist, have been built upon the
actual toil of some industrious ancestor. It does not
do for our wealthiest people, unless they wish to be
called simply aristocratic, to look beyond a genera-
tion, or, at the most, three generations, to find their
ancestry engaged in arduous labor, building from
that condition to a business career, and leaving be-
hind them at its close possessions upon which have
been erected great fortunes. In some instances, to
be sure, present fortunes are the result of fortunate
speculation or investment in real estate, but the rule
is the other way, and as first stated.
The American nation consists of workers ; and at
the present time more than at any previous period
the younger members of very wealthy families are
devoting their time and service to labor as assiduously
as if their subsistence depended upon their earnings.
In America, therefore, labor holds a more honora-
ble place in the minds of all the people than it does
ONE HUNDRED YEARS OF AMERICAN COMMERCE
17
in any other land, and individuals can look forward
to the highest class of associations, both social and
intellectual, as a result of their application of skill,
provided always they are ruled by integrity, and
shall build up a character which will sustain itself
under all conditions. A workingman may not en-
ter the highest social ranks while a workingman, es-
pecially in dense social centres, but in our country
villages and large towns observation teaches that the
American workingman has the entree to the best so-
ciety in his community, without regard to the size
of his bank-account, character being the card on
which he gains his admission. I have attended so-
cial functions where I have met skilled mechanics
and wealthy men, and have found them meeting on
an equality, each regarding the other on the basis of
the personal character which he brought to the
function.
There is another side to this, of course, and a
picture of certain features of American labor can be
drawn under which the individual feels that he
must keep at the bottom, at least, of the social
ladder. A study of conditions, however, proves
that the base of the social structure is growing nar-
rower as time, as education, as a wise altruism lead
men out of their lowly conditions to a better plane;
and the American laborer everywhere is an active,
earnest, and, I believe, an honest factor in keeping
up the struggle to secure a higher standard of liv-
ing. If the facts were otherwise the outlook would,
indeed, be a despondent one ; but a glance at the
facts proves the reverse, and shows that the propor-
tion of wage-earners of the total population is con-
stantly increasing.
Our 15,000,000, and over, of wage-earners con-
stitute a vast body on whose prosperity, intelli-
gence, and moral worth is based the welfare of the
Republic. With their happiness goes the happiness
of the whole people. When they are unhappy, dis-
turbed, and discontented the Republic is resting upon
an insecure foundation. I do not mean that discon-
tent can or ought to be removed, it being not wise
that perfect contentment should rule in all things,
for perfect contentment means a stationary condi-
tion. Progress can come only when the body of
workers in a community are contented because
moving onward and upward. Absolute " content-
ment with one's lot is the virtue of the subjects of a
despotically governed and non-progressive state,"
and this sort of contentment does not indicate hap-
piness, but a stationary condition, which ultimately
leads to retrogression, a loss of ambition, and the
growing disuse of the inventive genius of man.
Our American wage-earners demand, and are enti-
tled to, something more than is indicated by con-
tentment, for their experience with inventions, and
under our educational system, teaches them that
from rude instruments of toil they have become
intelligent factors, in both a social and a political
sense. They are not simply animals, wanting an
animal's contentment; they are something more,
and they want, and are entitled to, the contentment
belonging to the best environment. They are, in a
sense, and a valuable sense, the patrons of all that
gives character to a great nation. They believe in
education, in art, in music, in the progress of the
sciences, and in political purity, and are informing
themselves on the great topics which engage the
thoughts of our statecraftsmen. They are often
able not only to present their views clearly and
forcibly, but to indulge in discussions which would
be a credit to any legislative body. These features
constitute the American wage-earners' exceedingly
active, and, in a short-sighted way, sometimes un-
comfortable, elements in the great struggle that is
going on to lift themselves and all connected with
them to a higher plane of living. All who aid in
this struggle are the friends of humanity; all who
throw obstacles in its way are the enemies of
humanity — not knowingly, perhaps, but because
they cannot reach far enough in their comprehen-
sion of conditions, and growing conditions, too, to
see that happiness and prosperity must be the result
of the struggle. Selfishness and ignorance would
keep men on a level ; progressive movements mean
more, and look to the leading forth of all the best
faculties of all members of the community.
All the disturbances which we have seen during
the past score of years, and which seem, super-
ficially considered, to indicate that we are approach-
ing an industrial war, are but protests against fixed
conditions. These disturbances very often arise
from unwise considerations and from ignorance of
the conditions of production, but they all indicate
one grand trend ; and while it is to be hoped they
will grow less and less as intelligence develops the
unwisdom of certain forms of contest, they must be
considered as a part of the progressive movements
of our age, to be deprecated, to be sure, when there
is an inimical animus underlying them — to be dep-
recated, perhaps, in most instances — and yet, out of
them, American labor emerges with a clearer under-
standing of the inevitable conditions of life and a
clearer view of the higher ethical elements essential
to overcome them. These views constitute the chief
elements of what is known as the labor movement,
18
ONE HUNDRED YEARS OF AMERICAN COMMERCE
in which American labor has actively participated
for a great many years — first, seeking organization;
second, by organization, making its protests and
issuing its demands. Philosophically, these protests
and demands must be viewed as educational factors
and not as war factors.
I have always liked the definition of labor which
John Ruskin has given us. " Labor," he says, " is
the contest of the life of man with an opposite; the
term ' life ' including his intellect, soul and physical
power, contending with question, difficulty, trial or
material force. Labor is of a higher or lower order
as it includes more or fewer of the elements of life ;
and labor of good quality, in any kind, includes
always as much intellect and feeling as will fully
and harmoniously regulate the physical force."
The truth of this definition must be accepted, and
with its acceptance the labor movement, so-called,
is at once lifted from a sordid to a high ethical
plane; taken out of narrow grooves and made to
become the very essence of the whole of the relig-
ious and political movements of the closing years of
this century. Whether Ruskin's definition is recog-
nized or not, the truth exists, and so the struggle of
the wage-earner becomes of that high order which
insists upon recognition as a factor in securing to all
people something beyond the mere wants of exist-
ence. A man who is working simply to secure food,
shelter, and raiment, that is, the conditions abso-
lutely essential to keep him an efficient working
machine, is not the best product of civilization;
but the man who is willing to work industriously to
secure these absolute necessaries to make his serv-
ices efficient, and then, over and beyond them,
something of the spiritualizing necessaries of life, is
a credit to our civilization ; and these spiritualizing
influences can be secured only when, after paying
for the necessary lubrication of his working muscles,
he is able to furnish himself and his loved ones with
elements of life which have heretofore been consid-
ered luxuries. He must be able to secure some-
thing of these higher elements, or he loses, and
retrogression is the result. He must be able to
educate his family, and to give them of the best
things of life to such an extent that they become
active participants in the results of invention, which
throw around life everywhere more than could be
secured under old conditions.
With his conscience quickened by the very atmos-
phere that surrounds him, the wage-earner under-
stands, more than any other wage-earner anywhere,
that the sacredness of property must be insisted
upon and preserved, and that all attacks upon ex-
isting institutions must be repelled, especially when
those attacks are made for the purpose of destruc-
tion with a view to the building of a new structure
upon the ruins of the old. He is often radical in
his political views, but as a class in the community
he is ready to aid in the improvement of govern-
mental and social structures rather than to assist in
their destruction, even when the view is presented
that only on their destruction can a properly devel-
oped new structure be erected. He is often led
away by specious arguments, and under such condi-
tions allies himself to various so-called progressive
movements; but he is always open to conviction,
and when he sees that he is simply being led on the
old, well-beaten paths of iconoclasm, he turns and
allies himself with those who are seeking real and
true progress through evolutionary processes.
The American workingman is sometimes a social-
ist, but he does not believe that socialism, and espe-
cially political socialism, has anything in it which
will help him to secure the coveted margin over
necessaries — anything that will help him to things
spiritualizing. He is a socialist, as a rule, in a cer-
tain sense, but his socialism is not political; it comes
from a spirit within him, and it seeks to aid all who
are engaged with him in the struggle to secure better
environment. This sort of socialism in American
labor has no danger in it. On the other hand, it
is critical in its nature, and thus helps the whole
body of the people to understand what evils exist
and what conditions ought to be secured in their
place.
The American laborer, as such, is never an an-
archist, for he is a law-and-order man, and believes
that through development of the individual char-
acter the best social conditions can be reached. Now,
as the wage-earners of this country comprehend these
high and moral grounds more fully and more clearly,
they will become more contented in the true sense —
not contented to stand still, but contented with the
knowledge that they are progressing.
From what has been said it will be clearly under-
stood that conditions are not always favorable; that
there are fluctuations, business depressions, having
their discouraging influence, and strikes, unsettling
the public mind. The clash between ethical and eco-
nomical conditions leads to disruptions sometimes in
business associations, and arrays, to all appearances,
capital on the one side and labor on the other, and
gives color to the prophecy sometimes put forth that
ultimately this clash will lead to bloody strife. I
cannot acquiesce in this view, although I see clearly
the clash itself, and largely the causes for it. The
ONE HUNDRED YEARS OF AMERICAN COMMERCE
19
causes are mostly ethical, growing out of the rela-
tions of men and the lack of appreciation of the duty
which is owed to the public. Macaulay said that
the evils arising from liberty were only to be cured
with more liberty. So the evils which apparently
surround us at the present time, and which appar-
ently grow out of the industrial world, are the results
of an intelligence which did not exist in the past, and
the cure for them is more intelligence. Capital and
labor are intelligent enough to get into difficulty:
they are not intelligent enough yet to keep out of diffi-
culty. It requires a very high moral character on the
part of both employer and employee for each to rec-
ognize the rights and the privileges of the other; but
with this recognition, quarrels, as such, will largely
cease, and contests of mind will take the place of
those unhappy contests which are now so frequent.
When the employee recognizes that his highest social
duty is to render the very best service of which he is
capable, and the employer recognizes that his highest
social duty is to compensate the best service with
the best wage, a vast deal of friction will be avoided.
Integrity of business involves both the employing
and the employed elements of society. Confidence
in each other is the surest cure for many of the dif-
ficulties, and while the world is growing altruistic,
it will not grow altruistic at the expense of individ-
ual development; but after the rendering of the best
social service there will come a coordinated force
involving both altruism and individualism. Either
means destruction in a degree. Coordination means
success and reasonable happiness. The ethical force
cannot rule at the expense of the economical, nor can
the economical force rule at the expense of the eth-
ical. Their coordination is the true line of progress.
As American labor comprehends this more and
more clearly, and I believe it is comprehending
these principles, and as the employer comprehends
them more and more clearly — and I believe that he
is so doing — we may hope for the adjustment of dif-
ficulties on a plane of moral responsibility not yet
reached, except incidentally. The settlement of labor
controversies is one thing, their prevention another.
If the intelligence of different elements has not reached
that degree whereby they can be prevented, then
there should be some recognition of that settlement
and adjustment which recognize the importance of
each side in the success of industrial enterprises. Amer-
ican labor is doing much, and can do much more, in
bringing about such prevention and such adjustment.
May every struggle to that end meet with the cordial
appreciation and support of all right-minded citi-
zens! The century closes with omens of this con-
summation. We must not look for Utopias nor the
millennium ; but we must look for the evolution of
moral forces through industrial forces, for society
flourishes or decays as industrial elements prosper
or decline.
CHAPTER III
IMPORTS AND EXPORTS
THE imports and exports of the United States
are the expression and measure of its com-
mercial dealings with the nations and peoples
of the world. Their development and importance
have been commensurate with the economic growth
and political power of the country and people. To
compare the foreign trade of the United States in 1 79 5
with that in 1895 would be to compare a wheelbarrow
with a locomotive or an ocean liner. The local na-
ture, the simplicity of character, and the limited quan-
tity of the trade in the earlier period have become the
world-wide, the complex, and enormously extended
commerce of to-day. Then the trade was confined
as well by the limited markets as by the selfish greed
of nations possessed of colonial dependencies, mo-
nopolized by themselves in production and in com-
merce. Then the long and comparatively infrequent
voyages made commerce a matter of speculation,
of widely fluctuating prices, of capital at risk, and
consequently of doubtful returns. Now the world
is one great market to buy and to sell in. Prices are
equalized and made stable by banking facilities, by
rapid communication by mail or telegraph, by fre-
quent voyages, and by the free and cosmopolitan
movements of labor and capital. The millions ven-
tured in foreign trade in the last century have be-
come the hundreds of millions embarked in foreign
trade to-day ; and over and above the great transfer
of commodities from country to country there is a
large and ever-increasing transaction in securities,
national, State, and corporate. Mere statistics can
convey only one idea of this growth and develop-
ment. They may point out the mass or quantity,
which is the least interesting and vital phase of the
question ; but the nature or character of that mass
has also materially changed. It is on this change
of nature that I wish to say something.
When the peace of 1783 was declared the United
States comprised a strip of territory on the At-
lantic Ocean extending from Maine to Florida, and
bounded on the west by the Mississippi River. In
1790 the total area of settlement v/as 239,935 square
miles, having a population of 3,929,214 souls. In
this comparatively limited area important commer-
cial products were raised. The tobacco of Virginia
and Maryland supplied the world ; the rice and in-
digo of the Carolinas stood high in European mar-
kets ; and the fish and lumber products of New Eng-
land, with the breadstuff's of the Middle States, gave
a large and profitable commerce with the West Indian
Islands, then colonial possessions of Europe. In
New York the fur trade centered, and even as early
as this time the Northwest Territory pointed to an
agricultural possibility which fifty years later was
to begin an economic revolution in Europe, the re-
sults of which are still incomplete. The extension
of national territory west of the Mississippi, and
southward so as to include Florida and Texas, has
contributed to develop commerce on almost the
same lines which were marked out in the first years
of the Republic.
It was agriculture in 1795 which contributed most
largely to the export trade ; it is agriculture in 1895
which still feeds the largest part of the exports.
The rise of cotton culture, and its rapid extension
through the South, were the leading features of our
export development for fifty years. The rapid set-
tlement of the West, and an enormous extension of
agricultural production in cereals and provisions,
were the leading features of the subsequent forty
years. Beginning with 1816, the establishment of
manufactures, fostered and assured by the peculiar
inventiveness of Americans, laid the foundation of
industries which at the end of eighty years are fitted
in many lines not only to compete with, but almost
to supply, the world. In 1895 the estimated popu-
lation of the country was 70,000,000 and the area
of the country in land surface was 2,970,000 square
miles. The value of domestic exports per capita
of population in the last decade of the eighteenth
WORTHINGTON C. FORD.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
21
century was somewhat less than $6 ; the per capita
exports in 1895 were over $11. The productive
capacity of the country has thus been sufficient to
feed, clothe, and support in increasing comfort a
population which has increased in numbers seven-
teenfold ; and at the same time afforded a surplus
which has given an export trade double in relative
importance and increased fifty or sixty fold in abso-
lute value, as the $800,000,000 of 1895 represent an
enormous trade, conducted on a basis of low prices,
compared with the trade of 1795, conducted under
the regime of high prices.
The lasting and substantial qualities of American
export trade are proved by its survival of accidents
and adverse conditions which threatened at times
to overwhelm it. The Napoleonic wars practically
closed the ports of the civilized world to American
products and American shipping, and the disaster
was aggravated by the domestic Embargo. Wild-
cat banking schemes have periodically swept over
the country, entailing wide-spread ruin and economic
disturbance, shaking the commercial system of the
country to its very foundation. State and corpo-
ration repudiation and defalcation have at times
thrown a cloud over American interests, and have
retarded development, while even destroying some-
thing of what had already been accomplished. To
these exceptional and preventable conditions should
be added others which the economist has recognized
as periodic and inevitable — recurrent waves of finan-
cial distress and commercial depression, which have
seemed to follow a definite law, and yet can never
be foreseen, or their effects provided against and
neutralized.
The geographical distribution of exports would
necessitate a sketch of the changes in political divi-
sions throughout the world during the century. The
breaking up of the old colonial system and the rise
of independent States and powers, the formation
of alliances essentially modifying the sovereignty of
political divisions, have introduced so many new
conditions that the geographical nomenclature of
1795 will not apply in 1895. The great Spanish
and Portuguese colonies in the New World have
with few exceptions become emancipated from the
mother countries, and as independent powers have
sought and developed commercial connections pro-
hibited under the mercantile system of the last cen-
tury. Central and South America have framed and
maintained commercial systems of their own, instead
of feeding and supporting a commerce profitable
only to the mother state. The Floridas in 1795
were counted among the possessions of Spain. Hayti
was a French colony. Germany had no existence as
a united power, and the Hanse towns represented
commercial Germany. The trade with Canada was
of little importance. Australia was a geographical
name. Texas was part of a foreign country, as was
all westward of the Mississippi ; and the exchange of
merchandise with Africa and Asia, while important
even at that day, was limited in its development by
local hostilities and by trading monopolies.
The embryonic condition of exports is shown by
the distribution of 1 795. Of a total of nearly $48,-
000,000 outgoing, $31,000,000 were sent to Euro-
pean countries, $14,000,000 to the West Indian
possessions of those countries, and $3,000,000 to
all the rest of the world. The intimate connection
between political and commercial conditions is shown
by the fact that the exports to France and the French
West Indies were $12,653,635 ; to the Hanse ports,
$9,655,524 ; while to Great Britain and her posses-
sions in the West Indies and North America the
exports were $9,218,540. France ranked first in
importance, Germany second, and Great Britain
third. The treaty of Jay and the necessities of the
British West Indies made necessary some alterations
in the regulations imposed by Parliament on colo-
nial trade, and these changes were reflected in the
current of the leading exports of the United States.
France lost her dominant position and was super-
seded by Great Britain. This relative position has
never been changed.
A study of the yearly fluctuations in the export
trade, and a general statement of the leading causes,
would be of exceeding interest. Each article would
present the material for a study of commercial con-
ditions as influenced by competition, production, or
political factors. This, however, would be out of
the question in an article of this length. The high-
est development of exports has occurred within the
last thirty years, when the rapid settlement of the
West, and the improved methods of transportation
have enabled its products to reach a market at such
rates as allow aggressive competition with similar
products of other exporting countries. Without
modern appliances the large export trade in fresh
meats, butter, fruits, and even oleomargarine, could
not exist.
Another side of this story is of high economic
value, showing how a productive interest may wane
and die through the rise of more favorable condi-
tions elsewhere for producing or marketing, or by
the discovery of other products which will better
attain the end to which they are the means. In
the same manner an interest may out of a very small
22
ONE HUNDRED YEARS OF AMERICAN COMMERCE
beginning become sufficiently important to control
the market of the world. A century ago indigo was
a large product of the Carolinas ; it ceased to be an
article of export, in quantity, at the beginning of the
century. The United States was a large exporter
of rice in 1795 ; in 1895 it was an even larger im-
porter. Forty years ago whaling was a profitable
pursuit, and whale and fish oils constituted an item
of export. That industry has almost disappeared as
a commercial factor ; but the $2,000,000 or $3,000,-
ooo worth of whale-oil has been more than compen-
sated by the $45,000,000 of exports of petroleum,
an article which came into use about thirty years ago.
The ills of other nations have at times redounded
to the benefit of the United States. European wars
created an opening for the prepared meat products
of the West ; the vine diseases in the wine countries
of Europe gave an opportunity for an export of
American wine — an export which must grow. Coal
was not sent abroad in any quantity till 1850, but it
now represents a trade of more than $10,000,000.
Cotton was imported from the West Indian Islands
in 1795 ; it has long been the principal item of ex-
port. Copper, when it touched $2,000,000 in the
trade returns of 1858, was believed to have reached
a very high point ; but that product of the American
mine now controls the world's markets, and an ex-
port of $13,000,000 is not believed to have touched
an even reasonable limit.
In 1895, seventy per cent, of the total value of
domestic exports was composed of agricultural pro-
ducts. The products of the fisheries and of the
forest and mining, partaking of the qualities of agri-
cultural products in being subject to the law of
diminishing returns, raised the proportion to seventy-
seven per cent., leaving about twenty-three per cent,
contributed by American manufactures. The arti-
cles of food and the crude materials of manufactures
are exported to countries which have developed in-
dustrial rather than agricultural systems, and which
need the food to support their laboring populations,
and the raw materials to feed their industries. So
long as the United Kingdom held almost the mo-
nopoly in the great manufacturing industries where
machinery has superseded hand labor, our export
trade was chiefly with that country. Within twenty-
five years the rise of large manufacturing interests
on the Continent, and the extension of merchant
marines of continental countries, have been reflected
in the direction of American exports. What would
formerly have gone to Great Britain and thence been
distributed throughout continental Europe is now
sent to the continental countries direct.
To sum up, the United States export trade con-
tributes the cotton used in cotton manufactures
wherever the industry is developed ; by its bread-
stuffs and provisions it contributes a necessary ele-
ment to the support of the industrial peoples of other
lands, supplying a cheap and wholesome food ; its
mineral oils are to be found everywhere, giving a
cheap and safe light to peoples who have lived here-
tofore in semi-darkness ; its tobacco has always been
appreciated, as have its naval stores ; its agricultural
implements and tram-cars, its clocks and watches,
and its rubber goods are evidences of a superior
inventive ability. The lines of the export trade of
the United States are so broad and well defined that
nothing within the reach of human possibilities can
destroy their main features.
The imports do not require the special study that
exports seem to demand. The latter are a fair gauge
of the productive capacity of the country, for it is
only the surplus product which can be exported —
that which is beyond domestic consumption. Im-
ports measure the purchasing ability of the people
and constitute a rough measure of the industrial
advancement and of the degree of taste and well-
being attained. The development of the import
trade has been a process of selection, rejecting one
class or article and taking others, as the domestic
supply is sufficient or wanting. In the last century
all manufactures of a grade above the crudest were
brought in from abroad. There were few " indus-
tries " outside of the household industries, and con-
sequently little or no demand for raw material of
manufacture. A little cotton was imported ; some
lead from England ; and hemp, cordage, and cables
from Russia gave material for ship building; but
these few articles comprise all the imports which
can be directly identified with " industry." In 1795
a little unwrought steel came from the United Neth-
erlands ; somewhat later Swedish bar-iron took its
place ; but manufactured iron and steel have come
from the United Kingdom.
Compared with such a situation, the imports of
1895 offer a striking contrast. That there are a
large number of commodities of almost necessary
consumption which cannot be grown or prepared
in the United States needs no proof. Tea, coffee,
sugar, spices, and such tropical products can be ob-
tained in the required quantities by exchange more
easily and cheaply than by growing them. Articles
of food will, therefore, always constitute a large item
of imports, and in 1895 constituted one third of the
total. Imports of the crude materials of manufac-
tures—wool, cotton, flax, and hemp, coal and iron,
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24 ONE HUNDRED YEARS OF AMERICAN COMMERCE
and silk— constitute a measure of industrial growth thirds of the entire imports are received through
and conditions. By the establishment of domestic New York, and more than one half of the exports
industries, and by the refining of demand through are sent out through that port. The main geo-
the accumulation of wealth and the education of graphical features of the foreign commerce of the
taste, better products are demanded of both foreign United States are shown by the accompanying
and domestic manufacture. In 1895 the imports of figures :
IMPORTS AND EXPORTS IN 1895 BY GEOGRAPHICAL DIVISIONS.
IMPORTS.
PEE CENT.
EXPORTS.
PER CENT.
PER CENT. OF IM-
PORTS AND EXPORTS.
$•183,645,813
52.4
$627,927,692
77-7
65.72
133,915,682
18.3
108,575,594
13-4
15-74
112,167,120
'5-3
33.525.935
4-2
9.46
77,626,364
10.6
I7.325.057
2.2
6.17
17,450,926
2.4
13,109,231
1.6
1.98
?, 700,160,
.8
6,377,842
.8
•79
1454,891
.2
696,814
.1
.14
Total
$731,969,965
$807,538,165
100.00
$613,737,342
83.8
$590,392,743
73 i
78.21
Gulf ports
18,865,503
2.6
130,275,045
16. i
9.69
40,568,501
5.5
36,879,310
4.6
Northern border and lake ports . . .
51,016,783
7,78l,8-j6
7.0
I.I
49,991,067
6.2
.CI
Total
$7'U, 060.061;
$807,538,165
IOO.OO
materials in a crude condition for use in domestic
industries comprised more than one fourth of the
total imports. What remained were articles manufac-
tured which could not be obtained in this country
to meet the tastes of the consumer or to gratify the
whims of fashion. The crude materials are, as a
rule, obtained from agricultural countries of recent
settlement, or from older countries sparsely popu-
lated, with a semi-civilized people. Australia is the
great source of wool-supply ; Cuba of sugar, Brazil of
coffee, Asia of silk, Egypt of raw cotton, and South
American countries of hides, skins, and india-rubber.
Manufacured articles are of European origin.
A word may be added on the geographical dis-
tribution of imports and exports in 1895. The
United Kingdom received forty-eight per cent, of
the exports and contributed twenty-two per cent.
of the imports. No other country approaches this
percentage in American trade. The natural advan-
tages of the harbor of New York long since pointed
it out as a great commercial center ; while the enter-
prise and liberality of State and citizens in making
internal improvements have enabled it to maintain
a dominant position in the face of intense and ap-
parently almost destructive competition. Canals
and railways and banking institutions having foreign
connections have made the city what it is. Two
Foreign commerce must grow with the increase
of population and wealth. From time to time fears
have been expressed that the United States is not
holding its own in foreign markets ; that its products
are being undersold by similar products of other
nations. Russian and Indian wheat, Indian and
Egyptian cotton, Russian petroleum, and, last, the
grain products of the Argentine Republic, have ex-
cited apprehensions the full extent of which have
never been realized. That competition from the
outside must produce some effect need not be ques-
tioned ; but that this effect could ever end fatally to
the productive interests of the United States is be-
yond belief. If the agricultural products of our
country no longer meet with favor in foreign mar-
kets, there will always be room for our manufactures,
the export of which has shown in recent years a
marked increase. In 1875 the value of exported
manufactures was $92,678,814, constituting 16.57
per cent, of the total exports. In 1895 the value of
manufactures was $183,595,743, constituting more
than twenty-three per cent, of the total. It is in
this direction that the greatest development of
American exports must lie ; and the field is so vast
that it will more than compensate for any reduction
in demand for food products or for materials in a
raw condition.
Q.
V T T T T
CHAPTER IV
INTERSTATE COMMERCE
r I AHE colonies, under the lead of Massachu-
setts, early attempted to provide roads ; yet
.A. for more than two hundred years nothing ex-
isted in this country that by any stretch of the ima-
gination could be called a postal service. The only
carriers of commerce for nearly two hundred years
after the first settlers sought these shores were the
simple sailing vessels, that crossed the ocean only at
the greatest hazard. Courageous attempts to navi-
gate the ocean waters and the almost unknown rivers
and lakes were numerous before 1800, and canals,
even, were attempted. It can hardly be said, how-
ever, that anything deserving the name of interstate
commerce existed in this country at the beginning of
the present century, since at that time the total effects
of the government were transported from Philadelphia
to Washington in a frail sloop, and President John
Adams and his wife lost their way, as tradition has
it, in the woods beyond Baltimore, as they proceeded
in their carriage toward the new capital. The Alle-
ghanies constituted an almost impassable barrier be-
tween the East and the West, and such necessary
products as the colonists could not obtain in their
immediate neighborhoods were mostly brought from
over seas.
There was another difficulty in the way of trade.
The high price of labor rendered it impossible to
manufacture linen, cotton, or woolen cloth, except
at a cost twenty to fifty per cent, greater than the
same stuffs could be turned out for in England. The
trade of New Hampshire was principally in lumber
and fish, which were exported. In Massachusetts a
little wool and flax were worked into a coarse cloth,
and a few hats were made, but it was cheaper to
import them. In the province of New York the ex-
port of furs, whalebone, oil, pitch, tar, and provisions
included everything. So it was in New Jersey.
Virginia produced nothing for intercolonial trade.
Tobacco was a permanent staple, but it became
chiefly an export. The early colonists were inevi-
tably sailors. Therefore a considerable coasting trade
grew up, but there were no means of internal trans-
portation except by wagons and the rude craft plying
the natural waterways. In spite of this the Consti-
tution, which went into operation March 4, 1789,
embraced the right to regulate domestic commerce,
— a right not conferred by the previous Articles of
Confederation, — and from that year one may find
exhibits of the tonnage employed in the coastwise
trade. In 1789 this tonnage was 78,607; in i8ia
it was 477.971-
The Americans of those early times had only a
vague knowledge of the country west of the moun-
tains ; yet the hardy settlers along the coast soon beat
out for themselves paths to this unknown region. The
act to provide for the Cumberland road was passed
in 1806, and the first stage-coach driven from Cum-
berland to Wheeling in 1818. The length of the line
first opened was 130 miles, and its cost $1,700,000.
In those years, too, were tried the first experiments
with steam-craft. Livingston and Fulton built the
Clermont in 1807, and Fulton claimed under his pat-
ent a monopoly of transportation on the Hudson and
other rivers. His claim was carried to the courts
and defeated, so that after 1815 the rivers of the
country were free to steam- vessels. In 1812 steam-
boats made their appearance on the Western rivers.
The first craft, the New Orleans, built at Pittsburg
by Fulton at a cost of $40,000, a stern-wheeler of
between 300 and 400 tons, put out for New Orleans.
Others followed, but none proved able to ascend the
river, until 1815, when the Enterprise, a stem-wheeler
of 70 tons, made the trip from New Orleans to Cin-
cinnati in twenty-eight days. It was later than this,
again, that steamships came gradually to ply up and
down the coast.
26
ONE HUNDRED YEARS OF AMERICAN COMMERCE
The first charter for canal building was granted to
the James River Company by the legislature of Vir-
ginia in 1 785. Another of these projects was the Dis-
mal Swamp Canal, begun in 1 787, under a joint char-
ter from Virginia and North Carolina, and opened
in 1 794. The owners of its stock included George
Washington and Patrick Henry, and it was origi-
nally designed to facilitate the movement of lumber
out of the Dismal Swamp. The Chesapeake and
Ohio Canal, the Delaware and Chesapeake Canal,
and the Union Canal, of Pennsylvania, intended to
connect the Delaware and Susquehanna rivers, were
only forerunners of the Erie Canal, 363 miles long,
completed in 1825. A canal from Lake Champlain
to the Hudson River was completed in 1823. On
the opening of the Erie Canal the cost of freight
fell, according to its class, all the way in amount
from $15 to $25 per ton, and the time of transit
from twenty to eight days. Wheat was worth $33
per ton in western New York, and it did not pay
to send it to market, down the Susquehanna to Bal-
timore. The canal changed all that. Indeed, it
has been said that the Erie Canal added $100,000,-
ooo in value to the farms of New York State. It
made New York City the commercial metropolis.
Freight which had gone overland from Ohio to
Pittsburg and Philadelphia, at a cost of $120 per
ton, now went to New York by way of the lakes,
the great canal, and the Hudson. The opening of
the Erie Canal excited also a fever of enterprise in
canal building in Ohio, Pennsylvania, Massachusetts,
Maryland, and Virginia.
The first voyagers on the Great Lakes, La Salle
and Hennepin, set sail in 1678 in a schooner of ten
tons, which they had launched near the present city
of Kingston, Ontario. From the mouth of the
Niagara River they continued their journey by land,
and in the following May launched the Griffin, the
first sailing vessel to navigate the upper lakes. In
September they reached their destination at Green
Bay. From 1700 until 1756 the construction and
navigation of sailing vessels on the lakes was
largely confined to Lake Ontario. Then the Eng-
lish began to build and sail vessels upon Lake Erie
and Lake Ontario, and the commerce of Lake
Ontario increased so fast, that in 1800 it exceeded
that of all the other lakes together. The first Ameri-
can vessel to sail Lake Erie was launched at Erie in
1798. The first steam- vessel that navigated the
Lakes was built at Sackett's Harbor in 1817, and
measured 240 tons. The next year the first steam-
boat above Niagara Falls was launched at Black
Rock, and made voyages between that place and
Detroit. The schooner Illinois, 100 tons, was the
first vessel to arrive at Chicago from the lower lakes.
"This event," writes one, "occurred July 12, 1834,
when all the male inhabitants of the village, amount-
ing to nearly 100, assisted in dragging the craft across
the bar."
Gibson and Linn, according to Ringwalt, in 1776,
descended the Ohio and the Mississippi from Pitts-
burg to New Orleans, and brought back a cargo of
136 kegs of gunpowder for the use of the continental
army. When they reached the falls of the Ohio River
they were obliged to unload their boats and carry
the cargo around the falls ; but the success of their
trip gave an impetus to the flatboat trade which has
continued in one form or another up to the present
time. The first regular packet line between Pittsburg
and Cincinnati was established in 1794, and con-
sisted of four keel-boats of twenty tons each. They
were much like the modern canal-boats, and could be
either propelled by sails, pushed by poles, or towed
by horses. Freight charges were high, the following
rates for steamboats on the Mississippi having been
established by the legislature of Louisiana in 1812 :
From New Orleans to Louisville, four and one half
cents per pound for heavy goods, and six cents for
light, averaging five cents per pound, or per ton
$112; from New Orleans to Natchez, three quarters
of a cent per pound, or $1.50 per barrel; and the
same rate for all intermediate landings from New
Orleans to Louisville. Passage, $125 for the full
trip, and $30 to Natchez. Half-rates were allowed
for tonnage going down the river.
Hon. Levi Woodbury, who made a trip down the
Mississippi in 1833, says : " At every village we find
from ten to twenty flat-bottom boats, which, besides
corn on the ear, pork, bacon, flour, whisky, cattle
and fowls, have a great assortment of notions from
Cincinnati and elsewhere. Among these are corn
brooms, cabinet furniture, cider, apples, plows, cord-
age, etc. They remain in one place until all is sold
out, if the demand be brisk ; if not, they move farther
down. After all is sold out they dispose of their
boat, and return with their crews by the steamers to
their homes."
By 1856, however, the steam-tonnage of the Mis-
sissippi and its tributaries equaled the steam-tonnage
of the whole of Great Britain. Until 1850 the boats
measured from 200 to 400 tons ; but the builders en-
larged their vessels from year to year, until, in 1878,
they attained the size of the transatlantic liners. The
steam-tonnage of the inland and coast lines of the
United States increased from 24,879 tons in 1823
to 1,172,372 tons in 1876, as follows:
ONE HUNDRED YEARS OF AMERICAN COMMERCE
INLAND AND COASTWISE FLEETS, 1876.
NUMBKR OF
VKSSELS.
TONNAGE.
Atlantic and Gulf coasts 2,081 665,879
1'ucific coast 270 78,439
Northern lakes 921 201,742
Western rivers 1,048 226,312
Total 4,320
1,172-373
In 1891 there were on the Great Lakes 3700
steam- and sail-vessels, with a net registered tonnage
of 1,250,000 tons. In that year they carried 63,-
250,000 tons of freight, while in 1890 the ton-mile-
age carried by this fleet was 18,849,348 ton-miles, or
24.7 per cent, of the ton mileage of all the railroads
of the United States. The tonnage of the lake
marine more than doubled during the five years
from 1887 to 1892. On the 16,000 miles of the
navigable waters of the Mississippi River and its
tributaries there were afloat, in 1890, 7445 crafts
of all kinds, with a registered tonnage of 3,400,000
tons. During the year this fleet carried 30,000,000
tons of freight and 11,000,000 passengers. The
Hudson River had, in the same year, a traffic of
5,000,000 passengers and 15,000,000 tons of freight,
exclusive of 3,500,000 tons that passed through the
canals of New York by way of the Hudson River
to tide-water. The total for these four divisions of
waterways alone was 111,750,000 tons. The Mis-
sissippi Valley rivers furnish transportation facilities
for twenty-four States, embracing an area of 1,240,-
ooo square miles.
The average freight rate on wheat from Chicago
to New York in 1890 was 5.85 cents per bushel by
lake and canal, and 14.31 cents per bushel by rail,
the water cost being $1.94 per ton, and the rail cost
$4.77 per ton. The Erie Canal is only a little over
300 miles long, yet Mr. Albert Fink says that it regu-
lates the freight rates of all the railroads east of the
Mississippi River, not only on those whose tracks run
parallel with the canal, but upon those which run in
the opposite direction.
The development of the railway system of the
United States has been without a parallel. Time
and distance have been overcome, and the products
of the farmers, the lumbermen, the miners, and the
artisans now reach in successful competition the
markets of the world. The railway had its incep-
tion less than seventy years ago in the little four-mile
tramway constructed in the town of Quincy, Mass.,
and operated by horses. The first really important
railway was the Baltimore and Ohio, fourteen miles
of which were opened in 1830. In the same year
the South Carolina Railway was begun ; in 1833 it
was completed for 1 36 miles, and was then the long-
est railway in the world. It was also the first rail-
way to carry the United States mails. In 1834 the
opening of the Philadelphia and Columbia Rail-
road, as part of the system of internal improve-
ments of Pennsylvania, gave that State a continu-
ous line of railways and canals from Philadelphia to
Pittsburg. In 1835 the Washington branch of the
Baltimore and Ohio road was opened. The com-
pletion of the Boston and Albany road in 1841, and
a connecting-link composing the line from Albany
to Buffalo in 1842, marked the opening of the first
great railway line. The real beginning of interstate
commerce in this country may be said to date from
this time.
The total railway mileage of the United States has
now reached 178,000 miles, or nearly one half the
railway mileage of the world. The total mileage
of all tracks reaches 235,000 miles, representing a
capital of nearly $i 1,000,000,000 — an amount equal
to one sixth of the entire wealth of the country, and
five times greater than the entire circulating currency
of the United States. The annual earning capacity
of this capital is $1,200,000,000 — an amount more
than three times the entire annual revenues of the
government ; and it operates lines having an annual
traffic of over 600,000,000 passengers and 745,000,-
ooo tons of freight. An idea of the magnitude of
this single branch, concerned with the transporta-
tion of freight, may be conveyed when it is stated
that 745,000,000 tons means that a train of cars
long enough to reach more than six times around the
earth would be required to transport it all at a single
load. The average distance over which this freight
was hauled by the railroads was about 125 miles.
Set a single team to the task, and it would take it
something like 1,020,547 years to move the same
amount twenty-five miles.
The total number of tons of freight carried by the
steamers and sailing vessels of the rivers, lakes, and
coastwise transportation routes of the United States
in 1890 was 182,448,402 ; the tonnage moved by
the railways in the same year was more than three
times greater. Suppose that there had been no in-
crease since 1890 in the water traffic, and add to this
amount the freight traffic of the railways during the
year 1893, namely, 745,119,482 tons; this would
make the total average tonnage of the railways and
waterways of the United States 927,967,884. It is
difficult to believe that the railways of the country
moved in 1893 more than eleven tons of freight for
every man, woman, and child within the boundaries
of the United States.
As late as 1850 there seems to have been little
28
ONE HUNDRED YEARS OF AMERICAN COMMERCE
conception of the influence which the railways were
to wield in the development of the interstate traffic
of this great country, and of the country itself. It
was thought that they could not successfully compete
with waterways and canals, except where a speedy
carriage was essential. The solution of the problem
of cheap transportation from Pittsburg, for example,
was not reached until the railroads threatened to
take away all traffic from the traders ; so that Pitts-
burg coal can now be delivered in New Orleans for
about $2.60 per ton, although New Orleans is 2000
miles away by river. Cow Island, on the upper
Missouri, is 4300 miles from Pittsburg ; yet coal is
carried to market there, a distance as great as from
New York to the Baltic Sea. Not less than 20,000
miles of inland navigable waters are accessible to
these Pennsylvania coal traders. The aggregate
number of vessels engaged in this business is more
than 4000, and of the 13,000,000 tons of coal that
were mined in 1893 in the counties near Pittsburg
about 4,500,000 tons were carried to market by
water. Yet let me illustrate further the growth of
domestic trade in a part of our country which was
only lately as remote and undeveloped as the west-
ernmost provinces of Brazil. This growth, due to
the transition from the pony express to the trans-
continental steam-car, quickened the activities of
California and of the whole Pacific slope like the
inspiration of a new life. The assessed value of all
property within California rose from $260,563,886
in 1869 to $584,578,036 in 1879. In 1889 ship-
ments were made over the lines of the Southern
Pacific system of 1,140,596,010 pounds from San
Francisco, and of 1,571,347,605 to San Francisco.
The probable duration of an overland journey from
the Missouri River to California before the conti-
nental railways were constructed was about no days.
It took Lewis and Clarke two years and a half to
travel from the Mississippi to the mouth of the Co-
lumbia and back.
It is claimed that the practically unobstructed
competition which has prevailed among railways has
been a main cause of many consolidations of rail-
way interests. On the other hand, in defense of con-
solidation and combination, it is asserted that these
result in better and swifter service and lower rates.
Whatever the cause or causes, rates generally are
much lower than they were ten years ago. On
June 30, 1894, 44 railways, each with an operated
mileage of over 1000 miles, out of a total of 1039
operating corporations, controlled and operated 56.30
per cent, of the total railway mileage in the United
States. Extend the classification to include all roads
operating over 400 miles of line, and it appears
that 90 corporations operate 72.90 per cent, of our
total railway mileage. In 1837 the superintendent
of motive power of the Columbia and Philadelphia
Railroad reported that the following charges were
imposed on the railroads named:
FREIGHT RATES ON RAILROADS IN 1837.
RAILROAD.
Baltimore and Ohio
Baltimore and Washington
Winchester and Potomac . .
Portsmouth and Roanoke . ,
Boston and Providence
Boston and Lowell
Mohawk and Hudson
Petersburg
PER TON PER MILE.
CENTS.
These rates seem preposterous when compared
with the .878 of one cent per ton per mile, which
was the average charge on all the railroads of the
United States during the year 1893.
The growth of lake commerce in this country is
something marvelous. The increase of freight ship-
ments through the St. Mary's Canal, both east and
west bound, was from 1,410,347 tons in 1881 to
8,888,759 tons m I%91> or an advance of over 530
per cent. There was an increase in the valuation
of this tonnage from $28,965,612.92 to $128,178,-
208.51, or an increase of over 340 per cent. During
the season of 225 days in 1891 in which this canal
was open there passed through it 7339 steamers
and 2405 sail-vessels — a total of 10,191 vessels,
or an average of over 45 per day during the entire
season. The total registered tonnage for the season
was 8,400,680. The freight which passed through
the canal was carried an average distance of about
800 miles, at a cost per mile per ton of 1.35 mills.
The size of the vessels passing through the canal con-
tinues to increase. The average registered tonnage
per vessel in 1867 was 626.3 tons, while in 1891 it
was 962.1 tons. This freight-tonnage during the
season of 1889 amounted to 19,717,860 tons. The
tonnage passing through the same canal during the
season of 1890, including the foreign and coastwise
traffic, amounted to 21,888,472 tons, while the ton-
nage of all vessels of the Atlantic coast engaged in
foreign trade during 1890 was but little more — 22,-
497,81 7 tons. All the vessel-tonnage engaged in the
foreign trade, entering and clearing at London, Eng-
land, during the same year was 13,480,767 tons, and
at Liverpool the same year it was 10,941,800 tons;
so that the vessel-tonnage passing through the De-
troit River in 1890 was more than 8,000,000 more
than that of London, about double that of Liver-
pool, and nearly equal to that of the two combined.
EDWARD A. MOSELEY.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Another comparison : The tonnage passing through
the Suez Canal in 1890 was 6,890,094 tons— less than
one third of that passing through the Detroit River.
It should be recalled, too, that the Detroit River was
open for navigation during the season of 1890 only
228 clays, while the Suez Canal was open during the
entire year. Take one more comparison : The total
tonnage, entrances and clearances, of the foreign and
coastwise trade of Chicago and Buffalo for the sea-
son of 1 890, as compared with that of the four great
British ports, was as follows :
TONS.
Chicago 10,288,868
Buffalo 9,560,590
London 20,962,534
Liverpool 16,621,421
Glasgow 5.977.860
Hull 5,061,882
Carrying the comparison still further, the volume
of this inland trade is again shown in the figures
giving the foreign trade of the following great com-
mercial ports :
TONS.
New York 12,646,555
Hamburg 10,417,096
Antwerp 8,203,999
Marseilles 7>392>556
Havre 4,418,876
Bremen 3,481,769
Boston 2,676,387
Philadelphia 2,585,866
San Francisco 1,980,483
It will be seen that the commerce of the two in-
land cities, Chicago and Buffalo, consisting almost
wholly of a coastwise trade within the confines of
the Great Lakes, compares most favorably with the
tonnage movement of the great maritime cities of
the world.
In 1859 the average freight rate by lake on a
bushel of corn from Chicago to Buffalo was 15^
cents; in 1871 the rate was 7^ cents per bushel.
In 1857 the average rate by lake and canal on a
bushel of wheat from Chicago to New York was
25.29 cents; in 1870 the rate for the same service
was 17.1 cents per bushel; in 1880 it was 12.27
cents per bushel ; and in 1890, 5.85 cents per bushel.
In 1870 the average rate of freight by rail on a
bushel of wheat from Chicago to New York was
33.3 cents; in 1880 the rate was 19.9 cents; and in
1890, 14.31 cents. In 1867 the average rate for
carrying iron ore from Escanaba to Lake Erie was
$4.25 per ton; in 1870 the average rate was $2.50
per ton; in 1891 the average rate was 82 cents per
ton ; and at one time in that year it was as low as
55 cents per ton.
The benefit of these great reductions in lake trans-
portation rates appears very forcibly in the move-
ments of the huge cargoes of coal that are sent from
ports on Lake Erie to the harbors of the upper lakes.
In 1887 the average rate per ton for lake transpor-
tation of coal from Buffalo to Chicago was $1.05;
in 1891 the average rate was fifty cents per ton ; and
from November 10, 1891, to the close of navigation,
coal was carried from Buffalo to Duluth, a distance
of 1000 miles, for ten cents per ton. Using the
common unit (cost per ton per mile) for compari-
son, and taking the official report of the movement
of freight through the St. Mary's Falls Canal, the
ton-mileage rate has decreased as follows: 1887,
2.3 mills; 1888, 1.5 mills; 1889, 1.5 mills; 1890,
1.3 mills. The average revenue per ton of freight
per mile on all the railroads of the United States was
given at 9.4 mills in 1890, or more than seven times
as much as the cost of freight carriage through the
St. Mary's Falls Canal.
The regulation of interstate commerce before the
Declaration of Independence was by Parliament.
Under the Articles of Confederation trade was con-
trolled, where it was controlled at all, by the legisla-
tures of thirteen distinct sovereignties. It soon be-
came evident that the several States would not unite
in any general or fixed rule to govern commerce.
Discriminations naturally followed, which resulted
in confusion and discord among the different parts
of the confederacy. Accordingly one of the reforms
demanded under the old confederacy, and intro-
duced in the Constitutional Convention, was that
" Congress shall have power ... to regulate com-
merce . . . among the several States." The dis-
satisfaction among the States in respect to the inter-
change of trade, and the urgent demand for a uniform
and general principle controlling their commerce,
were clearly shown in the debates of the Constitu-
tional Convention. The following contemporane-
ous opinions are of interest :
"The want of authority in Congress, under the
confederation, to regulate commerce had produced
in foreign nations, particularly Great Britain, a mo-
nopolizing policy injurious to the trade of the United
States. . . . The same want of a general power over
commerce led to an exercise of the power, sepa-
rately, by the States, which not only proved abortive,
but engendered rival, conflicting, and angry regula-
tions." (Madison Papers, vol. v., p. 119.)
" The oppression of the uncommercial States was
guarded against by the power to regulate trade be-
tween the States." (Mr. Sherman, Deb. on Fed.
Cons., Mad. Pap., vol. v., p. 434, 1787.)
" Mr. Carroll and Mr. L. Martin expressed their
apprehensions, and the probable apprehensions of
30
ONE HUNDRED YEARS OF AMERICAN COMMERCE
their constituents, that, under the power of regulat-
ing trade, the general legislature might favor the
ports of particulai States, by requiring vessels des-
tined to or from other States to enter thereat."
(Ibid., p. 455.)
To cover this defect, Art. I., Sec. 9, Cl. 6, of the
Constitution was enacted, to wit : " No preference
shall be given by any regulation of commerce or rev-
enue to the ports of one State over those of another,
nor shall vessels bound to or from one State be
obliged to enter, clear, or pay duties in another."
General Washington, in a letter to a friend on the
weakness of the confederation, and pleading for a
stronger government, wrote: "We have abundant
reason to be convinced that the spirit of trade
which pervades these States is not to be repressed.
It behooves us, then, to establish just principles, and
this cannot, any more than other matters of national
concern, be done by thirteen heads differently con-
structed and organized. The necessity, therefore,
of a controlling power is obvious, and why it should
be withheld is beyond my comprehension."
Alexander Hamilton, in the " Federalist," Letter
VII., wrote : " The competition of commerce would
be another fruitful source of contention. The States
less favorably circumstanced would be desirous of
escaping from the disadvantages of local situation,
and of sharing in the advantages of their more for-
tunate neighbors. Each State or separate confed-
eracy would pursue a system of commercial probity
peculiar to itself. This would occasion distinctions,
preferences, and exclusions which would beget dis-
content. The habits of intercourse on the basis of
equal privileges, to which we have been accustomed
from the earliest settlement of the country, would
give a keener edge to those causes of discontent
than they would naturally have, independent of the
circumstances." Also, in Letter XXII. : " The inter-
fering and unneighborly regulations of some States,
contrary to the true spirit of the Union, have, in
different instances, given just cause of umbrage and
complaint to others ; and it is to be feared that ex-
amples of this nature, if not restrained by a national
control, would be multiplied and extended till they
became not less serious sources of animosity and dis-
cord than injurious impediments to the intercourse
between the different parts of the confederacy."
In the debates of the Constitutional Convention
the clause regulating commerce, etc., was agreed to
nem. con., not even a yea-and-nay vote being taken.
When the grant of this power to regulate commerce
among the States was made by the Constitution,
the traffic which might be controlled under it was
quite insignificant. On the land there was nothing
that could approach the dignity of interstate com-
merce, and its regulation, as also of that which was
exclusively State traffic, was for the most part left to
the rules of the common law. The exceptional regu-
lations, if any seemed to be called for, were made
by the State laws. For the regulation of commerce
on the ocean and other navigable waters, Congress
very promptly passed the necessary laws ; but its
jurisdiction within the limits of the States was not
very clearly understood, and it was not until the cele-
brated case of Gibbons vs. Ogden, decided in 1824,
that it was authoritatively and finally determined
that the waters of a State, when they constituted a
highway for foreign and interstate commerce, are, so
far as concerns such commerce, as much within the
reach of Federal legislation as are the high seas, and
consequently that exclusive right for their navigation
cannot be granted by States whose limits embrace
them. But while providing from time to time for
the regulation of commerce by water, Congress still
abstained from undertaking the regulation of com-
merce by land. The reasons were the same. The
land commerce was insignificant, and the rules of the
common law were in general found adequate for the
settlement of any questions. When Congress pro-
vided for the construction of the Cumberland road,
it was thought undesirable to regulate its use by
national law, or to take national supervision of the
commerce upon it ; and it was left to the supervision
and care of the States through or into which the
road was built. With the application of steam as a
motive power for propelling vessels, conditions were
immediately changed. But even then the circum-
stances were favorable to a prolongation of State con-
trol. The first improved highways were turnpikes,
the next in grade canals ; but the highways by water,
as well as the highways by land, were provided for
by the States. It was not unnatural that they should
be left in charge of the regulation of trade upon
them, especially as no complaint was made that
their regulations were unjust, or that they discrimi-
nated unfairly as against the citizens or the business
of other States. When, in 1830, steam-power began
to be applied to the propulsion of vehicles upon land,
the same conditions continued to prevail. The power
of the Federal government in the regulation of com-
merce between the States was put forth negatively
rather than affirmatively ; that is to say, it was put
forth in restraint of excessive State power, instead
of by way of affirmative national regulation.
1 See First Annual Report of the Interstate Commerce
Commission.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
31
The subject of the management of railways in re-
spect to interstate commerce had been more or less
discussed in Congress, when in March, 1885,3 reso-
lution was adopted by the United States Senate
empowering a select committee, known subsequently
as the Cullom Committee, to investigate it. On
January 18, 1886, this committee submitted a re-
port based upon testimony contained in more than
1450 printed pages. On page 40 the committee
says : " Unjust discrimination is the chief cause of
complaint against the management of railroads in the
conduct of business, and gives rise to much of the
pressure upon Congress for regulating legislation."
In summing up the testimony, on pages 180-182
the committee says : " The complaints against the
railroad systems of the United States expressed to
the committee are based upon the following charges :
(i) That local rates are unreasonably high, com-
pared with through rates. (2) That both local and
through rates are unreasonably high at non-compet-
ing points, either from absence of competition or in
consequence of pooling agreements that restrict its
operation. (3) That rates are established without
apparent regard to the actual cost of the service per-
formed, and are based largely upon what the traffic
will bear. (4) That unjustifiable discriminations are
constantly made between individuals in the rates
charged for like service under similar circumstances.
(5) That improper discriminations are made between
articles of freight and branches of business of a like
character, and between different quantities of the
same class of freight. (6) That unreasonable dis-
criminations are made between localities similarly
situated. (7) That the effect of the prevailing pol-
icy of railroad management is, by an elaborate sys-
tem of secret special rates, rebates, drawbacks, and
concessions, to foster monopoly, to enrich favored
shippers, and to prevent free competition in many
lines of trade in which the item of transportation is
an important factor. (8) That such favoritism and
secrecy introduce an element of uncertainty into
legitimate business that greatly retards the develop-
ment of our industries and commerce. (9) That the
secret cutting of rates, and the sudden fluctuations
that constantly take place, are demoralizing to all
business except that of a purely speculative charac-
ter, and frequently occasion great injustice and heavy
losses. (10) That in the absence of national and
uniform legislation the railroads are able, by vari-
ous devices, to avoid their responsibility as carriers,
especially on shipments over more than one road,
or from one State to another, and that shippers find
great difficulty in recovering damages for the loss of
property or for injury thereto, (i i) That railroads
refuse to be bound by their own contracts, and arbi-
trarily collect large sums in the shape of overcharges,
in addition to the rates agreed upon at the time of
shipment. (12) That railroads often refuse to recog-
nize or be responsible for the acts of dishonest agents
acting under their authority. (13) That the common
law fails to afford a remedy for such grievances, and
that in case of dispute the shipper is compelled to
submit to the decision of the railroad manager or
pool commissioner, or run the risk of incurring fur-
ther losses by greater discriminations. (14) That
the differences in the classifications in use in vari-
ous parts of the country, and sometimes for ship-
ment over the same road in different directions, are
a fruitful source of misunderstandings, and are often
made a means of extortion. (15) That a privileged
class is created by the granting of passes, and that
the cost of the passenger service is largely increased
by the extent of this abuse. (16) That the capitali-
zation and bonded indebtedness of the roads largely
exceed the actual cost of their construction or their
present value, and that unreasonable rates are charged
in the efforts to pay dividends on watered stock and
interest on bonds improperly issued. (17) That rail-
road corporations have improperly engaged in lines
of business entirely distinct from that of transporta-
tion, and that undue advantages have been afforded
to business enterprises in which railroad officials are
interested. (18) That the management of the rail-
road business is extravagant and wasteful, and that a
needless tax is imposed upon the shipping and trav-
eling public by the unnecessary expenditure of large
sums in the maintenance of a costly force of agents
engaged in a reckless strife for competitive business."
The report of Senator Cullom's Committee formed
the basis of the law commonly known as the Inter-
state Commerce Act, which became effective April
3, 1887. The Supreme Court in the case of the
Union Pacific Railway Company against Goodridge,
October term, 1892, in speaking of a similar act of
the State of Colorado, said : " This act was intended
to apply to interstate traffic the same wholesome rules
and regulations which Congress two years thereafter
applied to commerce between the States, and to cut
up by the roots the entire system of rebates and dis-
criminations in favor of particular localities, special
enterprises, or favored corporations, and to put all
shippers on an absolute equality."
The statute recognizes the fact that it is no proper
business for a common carrier to foster particular
enterprises or to build up new industries ; but, deriv-
ing its franchise from the legislature, and depending
32
ONE HUNDRED YEARS OF AMERICAN COMMERCE
upon the will of the people for its very existence, it
is bound to deal fairly with the public, to extend rea-
sonable facilities for the transportation of persons and
property, and to put all its patrons upon an absolute
equality. The laws making the giving of transpor-
tation privileges a criminal offense are at present
difficult of enforcement. Public opinion has not
yet been roused to the energetic condemnation
which is necessary to make these special favors as
completely unknown as they are at the post-office
window, where the value of every stamp must be
paid.
At the head of all the vast machinery employed
in moving interstate commerce are men of integrity,
and of ability rarely developed in other walks of life,
broad-gauged men, to whom the public is indebted
for the efficiency with which they carry on their stu-
pendous enterprises. Under the railway presidents
are the traffic managers, the passenger and freight
agents. The feeling of these men that they must
serve solely the corporations which employ them
has grown to be a second nature with them. Their
duty to the government and to the public, therefore,
is sometimes obscured, and it is hard for them to
realize that many practices which they have come
to regard as ordinary business methods are wrong.
So also the shipper and the merchant find it hard to
realize that the push and barter and dicker that have
made them successful must be abandoned when they
ship their merchandise ; that it is no longer to be
bargained for, and cannot be carried except at a
rate open to every competitor.
On February 4, 1887, the Act of Congress creat-
ing the Interstate Commerce Commission, and in-
vesting it with authority to regulate certain matters
with respect to commerce which were detrimental
to the public interest, and with authority to require
annual reports from all carriers engaged in carrying
interstate commerce, was passed. This act, being
in the nature of experimental legislation, has not
accomplished all that its framers hoped or intended,
but that great good has been accomplished cannot be
denied. Various defects in its practical application
have from time to time been brought to the atten-
tion of Congress, and amendments to remedy some
of them have been adopted. The statistics compiled
from the reports required under the provisions of this
act have marked a new era in railway statistics in this
country. Being compiled from sworn reports made
up on a uniform plan and for a uniform period, in
compliance with a requirement of law, and published
as official documents of the government, they are
accepted as authority, and eagerly sought after by
the public and by railway officers.
I may observe in closing that within the past two
or three years the courts have taken advanced ground
in asserting the power of the Federal government over
interstate commerce. It was held by the Supreme
Court in the case of Debs that " the government of
the United States is one having jurisdiction over
every foot of soil within its territory, and acting
directly upon each citizen ; that while it is a govern-
ment of enumerated powers, it has within the limits
of those powers all the attributes of sovereignty ; that
to it is committed power over interstate commerce
and the transmission of the mail ; that the powers
thus conferred upon the national government are not
dormant, but have been assumed and put into prac-
tical exercise by the legal action of Congress ; that in
the exercise of those powers it is competent for the
nation to remove all obstructions upon highways,
natural or artificial, to the passage of interstate com-
merce or the carrying of the mail; that while it
may be competent for the government (through the
executive branch, and in the use of the entire execu-
tive power of the nation) to forcibly remove all such
obstructions, it is equally within its competency to
appeal to the civil courts for an inquiry and deter-
mination as to the existence and character of any
alleged obstructions, and if such are found to exist,
or threaten to occur, to invoke the powers of those
courts to remove or restrain such obstructions." In
this case the extent and nature of the power of the-;
Federal government over interstate commerce, and
the methods by which that power can be applied,
were discussed. It was decided that the United
States Circuit Court, sitting as a court of equity,
has power to enjoin, at the instance of the Attorney-
General of the United States, acts of obstruction to
interstate commerce, notwithstanding that the acts
enjoined, or some of them, might amount to offenses
against the criminal law of the United States.
While it is clearly the fact that, under our form
of government, the national authority has no excuse
for interfering with the relations existing between
employer and employee in ordinary business transac-
tions, it is maintained by many that as the govern-
ment has control of the agencies engaged in interstate
commerce, those who are employed by such agencies
are also engaged in the public service, and for that
reason an obligation exists on the part of Congress to
enact such legislation as will tend to settle differences
which may arise between railroads and their em-
ployees without causing inconvenience to the public.
A
CHAPTER V
THE POSTAL SERVICE IN COMMERCE
IT is something more than a mere figure of
speech to call the post-office the right hand
of commerce. The rapid transmission of
news, domestic and public, has been of enormous
benefit to individuals and the general community,
but to the merchant it has been paramountly one of
the most important factors in successfully carrying
on his commercial enterprises. We can scarcely
conceive how a business of any consequence could
ever have been prosecuted without the aid of this
most important and, I am happy to say, best appre-
ciated branch of the government service. To tell
the story of the post-office in commerce, therefore,
would be to recite the history of the service itself,
from the time in England, in 1533, when the few
posts that were established were for the exclusive
use of the sovereign, down to the present day, when
the letter of the poorest and most despised person
in the British dominions or in the United States is
treated as sacredly and handled with as much care
as though it were written by the Queen of England
or the President of our country. Even with the
generous space allotted to me I can only hope to
allude briefly to the most important episodes in the
service, whose history is a part of the annals of
commercial progress throughout the world.
At the beginning of the seventeenth century there
were only four established posts in the British do-
minions— one to Ireland, one to Scotland, one to
Plymouth, and one to Dover, the last-named being
the most important and most used, because it passed
through the county of Kent, the highroad to the
Continent. There were no commercial relations
between one town and another, but the foreign trade
was considerable. Many foreigners, on account of
being persecuted in their native countries, had been
driven to London. It was the era of the Flemish
merchant, who introduced the manufacture of
woolen cloth, and so successfully that the exports
from England to the Netherlands in the time of
Philip II. amounted to 5,000,000 crowns annually.
These Flemish merchants were exceptionally intel-
ligent, and nearly all the peasants they employed
were able to read and write. A nice little quarrel
arose between the crown and the foreign merchants
in London. The latter claimed the right to send
their letters by their own agents ; the crown insisted
that all communications should be sent through the
regular channel. This feud had existed for many
years. A proclamation issued in 1591 gave the
state a monopoly of carrying letters through the
county of Kent, a law which was applied to all the
postal routes eighteen years later. In 1 603 another
proclamation gave to those who furnished horses for
the post carriers the exclusive right of letting horses
to travelers ; but the foreign merchants, against
whom these proclamations were directed, still per-
sisted in sending their letters by their own special
messengers, procuring horses from other quarters.
Another proclamation, in which magistrates were
urged to see that horses were procured at the post-
houses alone, had no effect. Under Lord Stanhope,
the master of the posts (what we should call the
postmaster-general) at that time, there was a for-
eigner of the name of De Quester, who was superin-
tendent of the foreign post, and who had discharged
his duties so faithfully, sending the government des-
patches with such promptness, that the king, in
1619, made him "Postmaster of England for For-
eign Parts out of the King's Dominions." Doubt-
less this appointment was partly intended to induce
the foreign merchants to give up their special mes-
sengers ; but it not only failed to produce that effect,
but gave dire offense to Lord Stanhope, who had
letters patent to his office which declared that he
had charge of the internal parts of the kingdom and
those "beyond the seas within the king's domin-
ions." In this way, through the practice of the
foreign merchants in employing special messengers,
a serious quarrel was brought about between Lord
33
34
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Stanhope, De Quester, and the king, which was
referred to the Privy Council for settlement. The
Council finally agreed that the foreign merchants
(who, by the way, were called " merchant adventur-
ers ") were " to have a post of their owne choice "
to the city of Hamburg and town of Delft, " where
the staples of cloth are now fetched, or to have such
other place or places whither the same shall happen
to be removed." This action superseded De Ques-
ter's appointment, though some few restrictions were
imposed upon the merchants. Stanhope gained a
lawsuit he had instituted to defend his rights, and
Billingsley, a broker who had been carrying the for-
eign merchants' letters, was sent to prison, but after-
ward, on petition to the king, released.
From the earliest days of the English post-office
the merchants had been favored ; their bills of ex-
change, invoices, and bills of lading, when written
on a single sheet of paper, were exempt from post-
age. The postmaster-general contended that the
exemption applied only to foreign letters ; the mer-
chants claimed that inland letters were included;
otherwise, they shrewdly observed, "letters might
go cheaper to Constantinople than to Bristol." The
result of the controversy was that the merchants
procured an act to be passed declaring their inter-
pretation of the law to be correct.
When Sir Rowland Hill, the father of penny
postage, was making his brave fight for postal reform,
he was glad to have the aid of a committee of
London merchants to collect evidence in favor of
his plans. The chairman of this committee was
Mr. Bates, of the house of Baring Brothers ; and
other members equally prominent were obtained
without difficulty. When the act in favor of penny
postage had passed the House of Commons the
measure had to come before the House of Lords.
The ultraconservative element were in the habit of
saying in those days, " Thank God, there 's a House
of Lords!" One of the members of the Mercantile
Committee, with an enterprise that would be com-
mendable in a nineteenth-century journalist, sought
to " interview " the Duke of Marlborough, who was
a member of the Upper House, thinking, very
properly, that if some expression from him in favor
of the measure could be obtained before it came up
for consideration in the House of Lords, it would
be of immense advantage to the postal reformers.
But " interviewing " was not in vogue in that day,
and the noble lords were unapproachable, especially
to persons who had " views " about reforming any
branch of the English government. The merchant,
representing the committee, wrote to the duke that
they would like to see him and present their reasons
for demanding reform in postal matters, and a re-
duction of the rate to a penny. The duke's reply,
through his secretary, was that "he is not in the
habit of discussing public affairs in private, and he
declines to receive the visits of deputations or indi-
viduals for the purpose of such discussions." Row-
land Hill then wrote a letter to his Grace, giving his
reasons for the establishment of a uniform penny
postage. The duke never answered the letter, but
when the debate came up in the House of Lords he
supported the measure. The merchant of to-day
will smile, as I suppose the merchants of that day
were amused, at the objection of one noble lord to
Rowland Hill's scheme. He argued that, under the
low rate of postage, the amount of correspondence
would be so greatly increased that " the whole area
on which the post-office stands would not be large
enough to receive the clerks and the letters." The
mind of many an English official or statesman be-
comes peculiarly dense when he comes face to face
with some reformatory measure that is going to
make things easier and more convenient for his gov-
ernment or the English people. Rowland Hill mildly
observed that his lordship should have no hesitation
in deciding " whether, in this great and commercial
country, the size of the post-office is to be regulated
by the amount of correspondence, or the amount
of correspondence by the size of the post-office."
In the early history of the post-office in America
it is singular that our colonies were considered sec-
ond in importance to one of the West Indian Islands.
By an order of the English government in 1688,
after prescribing the rates of postage to be charged
between the mother country and Jamaica, the order
reads: "And his Majesty is also pleased to order
that letter-offices be settled in such other of his
Majesty's plantations in America as shall be found
convenient for the service and the ease and benefit
of his subjects." Four years later, in 1692, Thomas
Neale obtained a grant from the crown authorizing
him to "set up posts in North America." Neale
never left England, but appointed Andrew Hamilton
his representative in this country. By 1698 a
weekly post, running over 700 miles of road, had
been established between New York and Boston,
and from New York to New Castle in Pennsylvania.
The postage on a letter between New York and
Boston was a shilling. £20 a year was paid "to
Mr. Sharpus, that keeps the letter-office at New
York," who earned ^170 in addition for carrying
the mail half-way to Boston, and the mail from
New York to Philadelphia. A salary of ^10 was
ONE HUNDRED YEARS OF AMERICAN COMMERCE
" allowed to him that keeps the letter-office at Phil-
adelphia," and an allowance of^ioo to the deputy
postmaster of Virginia and Maryland.
The receipts from the service increased each year.
In 1693 the receipts of the New York office were
£61; in 1695, £9,2; in 1696, ^93; in 1697,
;£«22. The "Boston, Road Island, Connecticut,
and Piscataway posts " produced from .£148 the
first two years 10^298 in the fourth. The post to
Philadelphia kept improving, but the Virginia and
Maryland routes never yielded anything; in fact,
were run at a loss of ^600, the correspondence not
exceeding i oo letters a year. The whole system did
not pay expenses, and in 1697 Neale was .£2360
out of pocket. The great question was then, as it
has been even in later years, " How can the postal
service be made self-supporting? " Hamilton pro-
posed that the rates should be raised, that the post
carriers should go " ferry free," and that ship-cap-
tains (after a regular postal rate had been settled
between England and America) on both sides of the
Atlantic should be required to take the mail they
had, at once, to the post-office of the port at which
they first touched. Under the new rate, the charge,
where the distance was not more than eighty miles
from New York, was sixpence ; to and from Boston,
twelvepence ; to and from Boston and Annapolis,
Md., thirty-six pence ; " to and from New York and
James Towne, 380 miles, and many broad and
dangerous bays and rivers to be ferryed over," thirty
pence. The English government, according to its
own home officials, had not supported the postal
service in the colonies as it should have done, the
extent of its interest showing itself in an annual
appropriation of ^50, in consideration of which the
government letters were to be carried free. Its
own postmasters-general, about this period, admitted
that the posts in private hands could not prosper for
want of due encouragement, and they recommended
that the service should be carried on by the govern-
ment. Neale's offer to sell his patent for ^5000,
or ^1000 a year for life, or for the unexpired term
of the grant (about sixteen years), was not accepted
by the government. He died in debt, his interest
in the posts having been transferred to Hamilton,
who died in 1703, when his widow took charge of
the business for three or four years, and in 1707 the
posts became vested in the crown. In 1722 the
posts began to be self-supporting. In August of
that year the postmaster-general wrote : " We have
now put the post-office in North America and the
West Indies upon such a foot that for the future, if
it produce no profit to the revenue, it will no longer
be a charge to it ; but we have good reason to hope
there will be some return rather from thence."
In these early days, when there was a monthly
service between Boston and New York, the post-
office in the metropolis was a locked box that stood
in the office of the secretary of the colony. It took
four weeks, in those times, to accumulate a post-
rider's mail, even with the " small portable goods "
that were allowed to be carried in that way. Later
on, in 1775, after the time of Benjamin Franklin,
the first postal reformer, who established the penny
post, made newspapers pay, quickened the pace of
the riders, advertised letters, etc., the New York
post-office was located in a printing-house in Water
Street. Ebenezer Hazard, a bookseller, was the
postmaster, and William Goddard, an enterprising
journalist and printer of New York (born in New
London, Conn.), had charge of the route to Phila-
delphia, Mr. Hazard managing the route to Boston.
This latter route will be remembered for notable
exploits in the way of post riding, including the ride
of Paul Revere, who in 1773 rode from Boston to
New York, and thence to Philadelphia, with the
news of the " Boston tea-party " ; that of Ebenezer
Hurd, who was in the service forty-eight years,
traveling over as much space as twelve and one half
times around the world, or as far as the moon and
half-way back ; and the most famous ride of Paul
Revere in 1775, when he proclaimed the intended
movement of the British army to Lexington and
aroused the people to arms.
The development of the ocean postal service
presents interesting phases. In the days of New
Amsterdam the whole colony looked upon the
arrival of a ship as the most important event of the
day. It was of special interest to the merchants,
whose correspondence was first delivered to them,
after which the letters for the general public were
distributed, the crowd always being down at the
dock waiting to receive their mail. The masters of
ships sailing to and from America in those days un-
consciously instituted what the well-known reformer,
Mr. J. Henniker Heaton, of England, is striving to
bring about in the present day— ocean penny post-
age ; that is to say, correspondents would drop let-
ters in a coffee-bag hung up in one of the coffee-
houses that were so common then on both sides of
the water, and the masters of the vessels would call
for the mail just before sailing, and deliver the let-
ters at the port of destination, charging one penny
for a single letter and twopence for a double one.
When Thomas Neale (already mentioned in this
article) failed to make the inland post pay in the
36
ONE HUNDRED YEARS OF AMERICAN COMMERCE
colonies, he proposed to establish sea rates of post-
age. Letters would then be in charge of the post-
office, and the shipmaster, as its agent, would hand
them over to a postal official on arriving in port.
Correspondence, it was argued, that was being
delivered by private hand, under the new system
would have to pass through the posts and pay regu-
lar rates, which should be sixpence for a single let-
ter, one shilling for a double letter, and one shilling
sixpence for a packet. The English postal author-
ities of that day were wiser than those of the time
of Rowland Hill, for they answered that the way to
increase the revenue of the post-office was to " make
the intercourse of letters easy to people." Rowland
Hill, one hundred and fifty-nine years later, had to
struggle long and hard to convince the post-office
department of the truth of this proposition, while
the postmasters-general in the time of Neale wrote :
" The easy and cheap corresponding doth encourage
people to write letters," and declared that the postal
revenue had been increased when the rate, before this
time, had been reduced from sixpence to threepence.
The system of the coffee-house delivery of letters
was used by the residents of " Breucklyn, Pavonia,
and Hackensack," who left their mail at some well-
known tavern previously agreed upon. This custom
was followed until after the English took possession
of New York. The best-known coffee-houses in New
York were the Exchange Coffee-House, located at
the foot of Broad Street, and the Merchants', located
on the southeast corner of Wall and Water streets.
After the War of 1812 the mails were carried by
the packet service, which had been rapidly devel-
oped, owing to the increased trade between America
and Europe. Frequent trips were made, and the
facilities for foreign correspondence were much bet-
ter than they had been. Then, from 1840 to 1855,
came the era of the clipper-ships, which were built
with special reference to speed, and whose services
were quickly utilized by the American newspapers,
the best representatives of our national spirit of
enterprise. One of these clipper-ships, in 1846 (the
Toronto, of the Morgan Line), beat the Cunard
steamer from Liverpool, bringing a copy of the
London " Times," containing European intelligence,
forty-two days later than the last paper received.
The New York " Herald " secured this prize, and
published an " extra " about it the same afternoon.
In 1845 Congress authorized the postmaster-
general to make contracts for the transportation of
the foreign mails, which had now become an impor-
tant feature of the postal service. After the ocean
mail service had become fairly started it was im-
proved rapidly. Various suggestions have been
made from time to time as to granting subsidies for
this service. My own opinion is that the ships
should receive proper compensation for carrying the
mails, on the same plan that we pay the railroads,
or should do the work under contract for specified
distances. The amount of foreign mail carried has
increased enormously. In 1840, when the Great
Western brought it over, the British mail amounted
to two sacks ; at the present time it amounts to five
or six truck-loads. Over 100,000 letters are now
despatched from New York every sailing-day, and
nearly the same number are received. The next
great step in perfecting this branch of the service
will be universal international penny postage. To
bring about this change, Mr. J. Henniker Heaton,
M.P. from Canterbury, has been and is working
with the same intelligence and persistency that
characterized Rowland Hill ; and eventually, I hope
and believe, he will meet with the same success.
The growth of the railway mail service is another
most important feature in the history of the postal
service. The railroad was first used as a post-office
in England in 1837, between Liverpool and Bir-
mingham. On the completion of the railroad line
the following year what was called the " flying mail "
train was started from the British metropolis to
Birmingham. In 1834 the mails were being con-
veyed in the United States over seventy-eight miles
of railroad, being carried in closed bags. In 1860
Postmaster-General Holt arranged to run a mail-
train between New York and Boston, via Hartford
and Springfield, with the idea of forwarding East
the Southern mail more promptly, instead of allow-
ing it, as the practice had been, to remain over a
day in New York. The following year a railroad
mail was established between New York and Wash-
ington. In 1863 it was suggested that "post-office
cars" could be placed on the principal railroad
lines, and that clerks could sort the mail for the
terminal points and intervening stations while the
cars were in transit. A test of this system was
made in 1864, under the direction of the postmaster-
general, by Colonel George B. Armstrong, at that
time assistant postmaster at Chicago. The test was
made between Chicago and Clinton, la., August
28, 1864. There were then no pigeonhole cases for
letters, nor such conveniences for handling the mails
as now exist. Under the system then in vogue they
were not necessary ; for postmasters were required
to post-bill all letters, paid and unpaid, wrap them
in paper, those for each post-office in the State being
done up separately, and write the name of the post-
THOMAS L. JAMES.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
37
office of destination on the package. Those for
other States were massed together, wrapped up, and
addressed to the nearest distributing post-office.
In 1864 a successful experiment of the same kind
was made on the route between New York and
Washington, expert clerks from the principal East-
ern cities being selected for the work, which, it may
be said, has been always exceptionally well done.
Even as far back as 1863 a convention of special
agents reported of the employees : " The amount of
labor they perform and the degree of intelligence
exhibited can hardly be estimated outside the
department."
In 1865, in quick succession, postal cars were
placed on the lines between Chicago and Daven-
port, la., Chicago and Dunleith, 111. ; and the
Chicago- Burlington and Galesburg-Quincy lines
were established. The first railway postal service
was put on the Philadelphia- Pittsburg route, on all
the principal railroad lines leading out of Chicago,
and on the Hudson River and New York Central
railroads, between New York, Albany, and Buffalo.
The new system made more rapid progress in the
West than in the East, the New York and Washing-
ton and the New York and Albany-Buffalo being for
a long time the only postal-car routes. But the suc-
cess of the service in the West led to its extension
not only in the Eastern States, but over the whole
country, so that by 1872 there were railway post-
offices on fifty-seven lines of road.
Another improvement that marks the progress of
the postal service was the change in the rate of post-
age in 1851. Before that year the rate was five
cents per half-ounce for a distance not exceeding 300
miles, and ten cents exceeding that distance. In the
year mentioned the rate was changed to three cents
per half-ounce for a distance not exceeding 3000
miles, and ten cents exceeding that distance. The
use of adhesive stamps was authorized in 1847 and
made compulsory in 1856. In 1863 the distance
limit for carrying a letter was removed. In the
same year the free-delivery or carrier system was
established in 49 cities. In 1895 the carrier service
is in use in 610 cities. There are about 12,000
carriers employed, at an annual cost of about $n,-
323,000. There are twice the number of carriers
now employed in Chicago than were in the service
throughout the entire country in 1864.
In 1854 the registry system was established, which
is certainly one of the greatest conveniences the
commercial world possesses. It took five years to
improve it and bring it into general use. The
safety of the system is illustrated by the fact that
the losses by fire, accident, and theft amount to but
one in every 16,306 pieces. About 15,000,000
pieces of all classes of matter are registered in a
year. In 1864 the money-order system was estab-
lished. Within the first six months 419 offices were
made money-order offices; now there are nearly
20,000 such offices.
Business men, more especially publishers, will re-
call the law of 1875 which enabled them to mail
newspapers and periodicals at the rate of two cents
per pound. Ten years later this law was amended
so as to make the rate one cent per pound. In
making this change the government showed that it
recognized the newspaper and the periodical as
educators. Although this wise provision has been
abused to such an extent as to make it largely
responsible for the postal deficiency, it is safe to say
that the law can be so amended in the future as to
stop the abuses complained of, and at the same time
preserve the undoubted advantages which, by its
operation, are conferred upon the people.
In the extent of its work and the manner in which
the service is performed it is safe to say that the
postal department in this country cannot be excelled
by any other in the world. A late English writer
(Mr. Herbert Joyce, of the London post-office) has
this to say : " American progress has long been the
wonder of the world, and in nothing, perhaps, has
it displayed itself more remarkably than in the mat-
ter of the posts. The figures which the United
States post-office presents to us year after year — fig-
ures as compared with which even those of the post-
office of Great Britain fall into insignificance — make
it difficult to believe that only two hundred years
ago an enterprising Englishman [Thomas Neale]
was struggling to erect a post between New York
and Boston."
The United States spends more money on its
postal service than any other nation, the expendi-
tures in 1874 amounting to $84,000,000, while
Germany, the next in postal rank, expended less
than $64,000,000, and Great Britain less than $37,-
000,000. The United States is ahead of the other
countries in annual transportation on railroads and
other roads, the miles of service in 1894 being 264,-
717,595 ; and in Germany, next in rank, 112,480,-
758. Our postal service gives employment to
about 180,000 persons ; that of Germany to 155,000 ;
and that of Great Britain to 131,000.
CHAPTER VI
OUR MERCHANT MARINE
EASTWARD for 3000 miles of the group of
fifteen States along the fringe of the sea
from Massachusetts to Georgia, which Jay's
treaty gave a recognized place among the mari-
time and commercial powers of the world, stretched
the barren Atlantic; for 3000 miles to the west
stretched forest, plain, prairie, mountain, and lake,
storing a wealth the extent of which no man of
that time, even in the most extravagant burst of en-
thusiastic prophecy, was to conjecture, and the de-
velopment of which has been the marvel of man's
industrial progress. If our merchant marine has
lagged far behind our other national industries ; if,
for the time, it has been outstripped by competitors,
while American manufacture and agriculture have
pushed themselves into the front rank, it must be
borne in mind that illimitable natural resources,
roughly to be gauged by the creation into new States
of over 2,000,000 square miles of territory, and by
an increase of upward of 60,000,000 in population
during the century, have stood behind the latter.
The American merchant marine, on the other hand,
in the unrestricted rivalry of nations, — which, from
the nature of the element, must obtain upon the high
seas, — for forty years has been hampered by the re-
tarded use of modern materials of construction, and
by restrictions forbidding it to enter that rivalry on
even terms with competing nations, which have
sought out and applied every device to promote
their own navigation.
The record of the American merchant marine
from 1795 to the present day may be divided into
two periods. The first, covering two thirds of the
century after the promulgation of Jay's treaty, was
a period of growth, culminating in the possession of
the largest tonnage which up to that time had ever
borne the flag of any nation but one, and in the
attainment by the United States of a rank on the
ocean second only to that of Great Britain and all
her colonies combined, with the promise that before
many years our sea power would be unsurpassed.
At the end of the second period the total tonnage
of our great rival surpasses ours three to one, and
on the ocean nine to one. We hold by uncertain
tenure third rank as a mercantile power on the sea ;
and of the hundreds of steamships under every flag
crossing the Atlantic and the Pacific from our shores
to the Old World, only fifteen fly the Stars and Stripes.
The dividing-line in time between these strongly
contrasting periods was vaguely within the decade
from 1855 to 1865. The forces which during this
interval turned our maritime progress into retrogres-
sion, in the order of their ultimate importance, were
the substitution of iron for wood as the chief mate-
rial of marine construction, the diversion of the
nation's energies from the sea to internal develop-
ment, and the losses inflicted upon our mercantile
marine by the Civil War. Even these causes would
not have sufficed to produce such destructive results
had not the inadequacy of our laws, compared with
the laws of rival nations, intensified their operations.
Wherein lies that inadequacy and how it may be
remedied are questions which unfortunately are mat-
ters of partizan dispute. They cannot, accordingly,
be discussed within the limitations necessarily placed
upon this volume.
On December 31, 1789, the merchant fleet of the
United States amounted to 201,562 tons, of which
123,893 tons were registered for the foreign trade,
68,607 tons enrolled for the coasting trade, and the
remainder engaged in the fisheries. In May, 1789,
James Madison, in the House of Representatives,
stated that the tonnage entered in Massachusetts,
New York, Pennsylvania, Maryland, Virginia, South
Carolina, and Georgia amounted to 437,641 tons
(including repeated voyages), of which only 160,907
tons were foreign. " This circumstance," said Mr.
Madison, "annexed to our capacity of increasing
the quantity of our tonnage, gives us a favorable
presage of our future independence." By 1795 the
ONE HUNDRED YEARS OF AMERICAN COMMERCE
tonnage of our merchant fleet had increased to 747,-
965 tons, and in 1820, in spite of the oppressive
influence of the Embargo acts, to 1,280,167 tons,
583,657 tons of which were in foreign trade, com-
pared with a tonnage for the entire British empire
of 2,648,593 tons. Three years later the American
tonnage (counting repeated voyages) entering the
United States from foreign ports amounted to 810,-
761 tons, compared with 119,487 foreign, of which
89,553 tons were British.
At the outset the efforts of the United States to
engage in the carrying trade were met by discrimi-
nating duties imposed by our older rivals on Ameri-
can vessels. Sharp retaliation, begun by the first
Congress and consistently followed up, forced nation
after nation to withdraw from this mode of warfare
upon our commercial life, and led to a series of
treaties of friendship, navigation, and commerce,
which are the basis of our trade relations with the
world. By these treaties, associated with illustrious
presidents, and negotiated, as secretaries of state and
ministers, by Albert Gallatin, John Quincy Adams,
Henry Clay, Martin Van Buren, Daniel Webster,
James Buchanan, Hamilton Fish, Thomas F. Bay-
ard, and others, the United States obtained for their
vessels in the ports of nearly every civilized nation
equal treatment with that accorded to the vessels of
the nation itself, and in return granted to foreign
vessels in our ports the same treatment which we
accord to American vessels. The negotiation of
these treaties is doubtless the most splendid achieve-
ment of American diplomacy ; it is surely one of the
greatest boons ever conferred upon the mercantile
marine of the world. The destructive effects of
discriminating and retaliatory taxation of shipping
upon all who resort to it had been forced home
upon our early statesmen by the experience of the
colonies and of the Confederation ; and in freeing
for all time American shipping, and with it the ship-
ping of the world, from such warfare, they gave to
navigation and to the international trade by which it
lives an impetus equal in its way to that given by
the substitution of steam for sail.
Enlisting a people predisposed to the sea, within
easy reach of boundless forests permitting the build-
ing of vessels more economically than was possible
in England, which was already compelled to import
much of its ship-timber, and freed by diplomacy
from foreign restrictions, the American merchant
marine in 1860 had reached the impressive total of
5>353,868 tons, of which 2,379,396 tons were regis-
tered for foreign trade. The total tonnage of the
United Kingdom was but 4,586,742 tons, and of
the entire British empire, 5,710,968 tons, while the
combined tonnage of France, the component parts
of the present German empire, and Norway was lew
than the tonnage we were employing in foreign trade
alone. The tonnage (including repeated voyages)
of American vessels entering the United States from
foreign ports during that year was 5,921,285, and of
foreign vessels, 2,353,911 tons. The tonnage of
American vessels entering and clearing at the ports
of Great Britain and Ireland was 2,981,697 tons,
against 3,227,591 tons German and French com-
bined.
In 1850 the new tonnage built by the United
States amounted to 272,218 tons, while that built
by Great Britain amounted to only 133,695 tons.
In 1860 our new tonnage was 214,798, and that of
our foremost rival, 301,535 tons. Our relative
positions had changed during the decade before the
war. In 1 85 5, the year of our greatest construction,
the United States built 2027 vessels, of an aggregate
tonnage of 583,450, of which 381 were full-rigged
ships. By a steady and rapid decline, without equal
in our marine history, the product of our yards in
four years fell to 875 vessels, of 156,602 tons, in
1859, of which but 89 were full-rigged ships, ris-
ing in 1860, but only to 214,798 tons. The decline
is not to be attributed to the substitution of steam
for sail, for, as the home of Robert Fulton, this
country in the early years of steam-navigation easily
took and held the first rank. In 1860 our steam
fleet aggregated 867,937 tons, of which 97,296 tons
were registered, against a total steam tonnage of
only 500,144 for the entire British empire. But
the change from wood — the material of marine con-
struction in which our new country abounded — to
iron, in the cheap production of which Great Britain
excelled, completely altered the conditions of ship-
building, and thus changed the conditions of our
own and competing merchant marines. The reasons
for this change of material, as well as the changes in
models which it necessitated, may be more appro-
priately considered under American Ship Building.
Only the fact and its relation to our merchant marine
are within the scope of this article. The fact be-
came important because our laws restricted the
American merchant marine to home-built ships.
We stood by the principle that the privileges of the
flag and of national register should be bestowed
only on home-built ships. Great Britain and other
nations had already abandoned that principle, or
soon after gave it up. Her foreign and colonial
relations, too, had impressed upon England the im-
portance of established lines of steam-communica-
40
ONE HUNDRED YEARS OF AMERICAN COMMERCE
don by sea, and forced upon her the policy of liberal
assistance in the establishment and maintenance of
such lines. Without insular or remote dependencies,
and freed from foreign complications, the United
States lacked the motive which made popular in
Great Britain the policy of steamship subsidies ; and
we took it up and abandoned it intermittently, thus
establishing an uncertainty in legislation which in
business affairs is often industrially more harmful
even than a wrong policy consistently pursued.
The policies of admitting foreign-built vessels to
the national register, — or " free ships," as it is popu-
larly designated, — and of subsidies to shipping, may
not be considered, under the restrictions placed
on this article; but without transgressing proper
bounds, it may be said that the two are not con-
flicting nor alternative policies, but independent
methods of dealing with different subjects. The
former aims to encourage navigation under the
national flag; the latter to promote domestic ship
building. All other nations have adopted one or
both of these policies. Our own country has adopted
and consistently followed neither. Our merchant
marine, in consequence, has naturally yielded place
on the seas to rival nations which hastened to adopt,
and have steadily supported, legislation adjusted to
the changed conditions of construction wrought by
the substitution of steel for wood as the chief mate-
rial of ship building.
Eastward for 3000 miles from our shores stretched
the Atlantic, barren, but familiar in its dangers and
rewards, and as naturally the home of the ambitious
American as of the ambitious English boy, as natu-
rally the place for the investment of American as of
British capital. For more than half a century it had
been the scene of many of our enterprises. The
discovery of gold in California in 1 849 ; the begin-
ning of our railroad system, which doubled in the
decade from 1855 to 1865 ; the discovery of petro-
leum, carrying confusion to our whaling-fleets, — to
name but a few of many causes,— at this time turned
westward from the sea our enterprise and capital.
The certainty of reward for labor and capital, and
the amount to be hoped for, were greater there than
the Atlantic or China trade could offer ; and from a
maritime power, pressing close upon Great Britain,
the United States became a railroad power of the
first magnitude. Other articles of this centennial
volume, testifying to our wonderful inland growth,
bear silent witness to one cause of the decline of
which this article is required to speak.
From 1861 to 1865, the period of the Civil War,
the American tonnage registered for the foreign
trade fell from 2,540,020 tons to 1,504,575 tons;
and within the four years immediately following the
blockade of Southern ports by the Union fleets and
the fitting out of Confederate privateers to destroy
Northern merchantmen, 874,652 tons of American
shipping were transferred to foreign flags. In Sep-
tember and October, 1862, the Alabama burned
eighteen American merchantmen ; and the damage
then done to American vessels and cargoes by pri-
vateers fitted out in British ports was later com-
promised by the payment of $15,000,000 to us by
Great Britain. In 1865 the tonnage (including re-
peated voyages) of American vessels entering the
United States from foreign ports had decreased to
2,943,661 tons, while the foreign tonnage had in-
creased to 3,216,967 tons. The war thus tremen-
dously accelerated a decline of American shipping
which from other causes was already inevitable.
The carrying power of the world's sea-going mer-
chant marine in 1875 was 28,407,946 tons ; in 1895
it is 49,526,847 tons. The relative rank of the five
principal sea powers at the beginning and end of
this period follows :
MARITIME POWERS, 1875 TO 1895.
1895.
I87S-
British
27,885,806
13,^47.^8^
German
4,065,282
1,604,773
i 261.082
4IO6 467
Norwegian
2,W?,I73
i,40t;,<x8
French
2,121,550
• i.ttfo.aoo
All others
0,84.0,0^4
6,204,879
Total
4Q. ^26.847
28.4.07.04.6
During the last twenty years the United States
and Germany have changed their relative ranks,
and this year only seven per cent, of the world's
sea-going tonnage is under the American flag, as
compared with fifteen per cent, twenty years ago.
The United States and Italy alone of the ten prin-
cipal maritime nations show a decline in over-sea
carrying power since 1875.
During the fiscal year 1 894 the tonnage of Ameri-
can vessels (counting repeated voyages) entering the
United States from foreign ports was 4,654,679 tons,
while the foreign tonnage was 15,334,984 tons.
The American tonnage entering from Europe was
341,876 tons; the foreign, 9,326,235 tons. Trans-
atlantic voyages from the United States to Europe
and Africa numbered 187 under the American flag,
compared with 5626 under foreign flags; of trans-
pacific voyages to Asia, Australia, and Oceanica, 311
were under the American and 351 under foreign
EUGENE T. CHAMBERLAIN.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
flags. Our shipping in foreign trade is now almost
wholly engaged in voyages on the Lakes and north-
ern borders to the British possessions, and to Central
America, the Caribbean coast of South America,
and the West Indies. The statistics given, and con-
clusions to be drawn from them, should be modified
by one consideration, which, though not a matter
of official record, is a well-understood business fact.
Within the last fifteen years American capital has
purchased abroad a considerable number of steam-
ships, and American enterprise is operating them in
transatlantic trade. Though barred by the law from
the use of the flag, these vessels are the evidence of
an awakened maritime spirit, promising the attain-
ment of higher maritime rank by the nation. This
awakened spirit has already secured the admission
of the Paris and New York and the construction of
the St. Louis and St. Paul, giving to the country a
line of four steamships unsurpassed in the world.
The United States, in consequence, for the first time
in many years, have entered into competition for
the express, passenger, and mail traffic of the north
Atlantic. In one instance we have thus adopted
the policy — free ships and liberal compensation to
home-built ships for public services — by which our
rivals on the sea have made themselves formidable.
If that instance is sporadic, its full results are already
in sight. But if it is the beginning of a new policy,
approved by the experience of nations, we are enter-
ing our second mercantile century with the promise
of a restored merchant marine.
More than fifty years must pass before the history
of the first century of our merchant marine on the
Pacific coast can be written. Beginning in 1849 at
San Francisco with 722 tons sail, our Pacific fleet
doubled its tonnage during the war period, and now
numbers 1520 vessels, of 456,359 tons. San Fran-
cisco stands alone among our chief seaports as enter-
ing and clearing in foreign trade a larger tonnage of
American than of foreign vessels ; and with the open-
ing of new Asiatic markets and the need of steadily
increasing tonnage our geographical position des-
tines us to be the sea power of the Pacific. The
century's record of American shipping on the At-
lantic coast has been a story of national pride, tem-
pered with national regret and mortification ; the
record of our shipping on the Pacific is one of brief
achievement and good promise. Splendid perform-
ance and bright augury, not only for the particular
section itself, but for our national future as a mari-
time power, fill every year of the record of our mer-
chant fleets on the Great Lakes. Two years after
Jay's treaty the first small merchant vessel was built
on the lakes west of Niagara, and when the first
half-century was ended the tonnage of our lake
ports was only 89,000 tons. On June 30, 1895, our
lake fleets comprised 3342 vessels, of 1,341,459 tons,
half in numbers and two thirds in tonnage being
steam-vessels. This fleet in carrying power may be
estimated at 2,666,261 tons. These figures mean
that we have created on our inland seas a mercan-
tile naval power excelled only by the strength of
Great Britain or Germany on the high seas, greater
than France or Norway, or than any other two
maritime powers combined. Natural bonds, easily
broken, fetter from free employment on the ocean
our reserve powers as a ship-building and ship-own-
ing nation, now confined to the Great Lakes. So
eager to pass these barriers have these powers been
that the lake interests have built steamships for the
Pacific trade, cut them in two in order to pass the
locks and canals which separated them from the
Atlantic, and then put them together for the voyage
round the Horn. Of our 669 steamships of over
1000 tons, 359 are shut within the lakes. Our
production of iron and steel draws close upon, and
in several years has surpassed, that of Great Brit-
ain. Freed by a ship-canal to the Atlantic, our
lake ship-building interests — having close at their
doors the center of production of sixty per cent, of
our iron output — can compete on the high seas,
and who could then doubt that interests which in
confinement have outstripped the nations of the
world, except two, will help to restore to the United
States again the rank it held as close second to the
entire British empire only thirty-five years ago ?
Join the union of the Great Lakes to the Atlantic
with a removal of the narrow Central American
barrier which separates the Atlantic and Pacific,
and, as steel in time becomes cheaper here than
anywhere in the world, may we not look even to
surpass in the first half of our second century the
rank we attained in the first half of our first century,
and take to ourselves the rule of the wave?
Eastward of the forty-four States of the Union for
3000 miles, westward for 5000, stretch the oceans
as we begin our second century of commercial in-
dependence, a nation richer in performance and
promise than any other the world knows. Geog-
raphy, natural resources, and our benign policy of
neutrality point to an ultimate destiny for this country
as the world's great ocean carrier of the future.
&U3UU.
CHAPTER VII
OUR COMMERCIAL WEALTH AND VOLUME OF BUSINESS
N'OT since the history of the world began has
there been such a marvelous advancement
of all factors creating wealth and developing
trade and commerce as during the past century ; nor
in any other section has the result been so phenomenal
as that attained in the United States. In 1795 this
country had acquired but a fraction of its present
geographical limits ; to the West it reached only
to the Mississippi River, and not until 1803, by
the purchase of Louisiana, did its territory extend
north and west to the Pacific and south to the
Gulf of Mexico. In addition to the thirteen
original States, Vermont and Kentucky had been
admitted to the Union ; but the populated area of
the country was only 366,000 square miles, against
3,580,000 square miles to-day ; and the total popu-
lation was approximately 4,500,000, scattered along
the Atlantic coast, the center being about the city
of Baltimore ; while to-day the population is about
70,000,000, or more than fifteen times as great, the
center of population having moved almost directly
west nearly 500 miles.
It is hardly necessary to explain that the com-
merce of the country in 1795 gave little promise of
what it has since become. The only efficient means
of transportation were, of course, by water, travel by
land being a tedious process, in wagons or on horse-
back, over rough and unsatisfactory roads. It is
self-evident that domestic trade at that time was of
a primitive character, and any attempt to fully char-
acterize it must fail except in so far as indicated by
a comparison of imports and exports.
Leading domestic industries one hundred years
ago included the manufacture of household and
other (chiefly wool and hemp) textile products and
rag carpets, pig and bar iron in a small way, wheel-
wrighting and smithing, lumber, carpentry, furniture,
wagons, harness, hats, shoes, ships, and meat pro-
ducts, the whole probably not aggregating very
many million dollars in value annually. A review
of the total value of the annual products of these or
like domestic industries in the census year 1890
presents a picture of unparalleled expansion, the
value of the products in the nineteen lines indicated
amounting five years ago to the enormous total of
more than $4,107,000,000, in addition to which our
metallic and mineral products in 1890 were valued
at fully $587,000,000. It would be impracticable
to indicate fully the thousand and one kindred in-
dustries to which some of those identified with the
earlier history of our country have given rise. And
no reader of these pages need be reminded of the
enormous stimulus to the production of wealth
resulting from the railroad, which is only about sixty
years old, from the discovery of petroleum or min-
eral oil, the manufacture of illuminating gas, and
the production and development of electrical motors
and appliances.
The total value of foreign shipments from the
United States in 1795 was about $47, 989,000, which,
while small when viewed from the standpoint of to-
day, meant a great deal at the time, in that it repre-
sented an increase of 1 50 per cent, over the total four
years previous. The exports were mainly to France
and her possessions, the free cities of Hamburg and
Bremen, Great Britain and her dependencies, Spain
and her possessions, the United Netherlands, the
Danish West Indies, Italy, China, and the East
Indies. Traffic with Russia was of some impor-
tance, but with the other countries of northern
Europe it was inconsiderable.
A fair estimate of the character of our export
trade at that time may be gained from a report of
the Secretary of the Treasury in 1793, covering the
year 1792, which enumerates, among the leading
articles of foreign shipment, breadstuffs, tobacco,
rice, wood, salted fish, pot and pearl ash, salted
meats, indigo, horses, mules, whale-oil, flaxseed, tar,
pitch, and turpentine, breadstuffs constituting more
than one third of the whole. South Carolina and
42
ONE HUNDRED YEARS OF AMERICAN COMMERCE
« Georgia were prominent as producers and shippers
of indigo, but that was before cotton had become a
noteworthy product. It had been grown and ex-
ported as early as 1791, but only in small quantities ;
the cotton-gin, invented by Eli Whitney, did not
appear until two years later. In his celebrated re-
port on Manufactures, Secretary Hamilton, though
expressing the hope of a future of usefulness for the
cotton industry, yet said that, " not being, like hemp,
an universal production of the country, it afforded
less assurance of an adequate internal supply ; " and
he devoted some space to the advocacy of the re-
peal of the duty on imported cotton, as well as of
granting a bounty on cotton produced in the United
States, when wrought at a home manufactory. In
a comparatively few years, however, all this had
changed, and American cotton had become a factor
of the first importance in the commerce of the world.
At the period under consideration the import ex-
ceeded the export trade in value. Imports for the
year 1795 were valued at $69,756,258. Of this
total, $30,972,215 came from Great Britain and
her possessions, England furnishing $21,108,350.
Next in importance was France and her possessions,
of which contributions the French West Indies sup-
plied the greater share. Following these came in
order Spain and her possessions, the United Nether-
lands and their possessions, the Danish West Indies,
Portugal and her possessions, Hamburg and Bremen,
Russia, China, and the East Indies. The importa-
tions from Great Britain comprised manufactures of
wool, cotton, linen, silk, metal, glass, and paper,
together with salt, steel, lead, nails, cheese, beer,
and porter; those from the East Indies included
cotton, sugar, and pepper; from the West Indies,
spirits, sugar, and coffee ; and from other countries,
coffee, sugar, molasses, brandy, gin, wines, and tea.
Although the total value of exports from the
United States one hundred years ago was $47,989,-
472, by 1844 (fifty years later) it had grown to
$105,745,832 — more than doubled. It was during
this period, of course, that highways were con-
structed between some of the larger trading centers,
that the Erie Canal was built, and that the country
reached a high degree of prosperity as a commercial
nation. It was obliged to wait for the development
of its agricultural resources and its shipping interests
on the New England, south Atlantic, and Gulf
coasts. The total value of importations in 1795
was $67,756,258, and fifty years later (in 1844) it
had grown to $102,604,606, an increase of more
than fifty per cent.
While to no nation has been given a preeminent
manufacturing genius, yet we have probably de-
veloped peculiar skill not only in improving upon
inventions which came to us in the rough, but also
in the more general utilization of them upon a much
grander scale. At the outbreak of our late Civil
War the total value of exports had increased to
$333i576>°57> about seven times the value sent
abroad in 1795. The aggregate value of importa-
tions in 1860 was $353,616,119, being five times
the corresponding total in 1795.
In 1877, at the beginning of the revival after the
period of depression following the panic of 1873
(which was the outcome of inflation, overtrading,
and speculation succeeding the war), exportations
for the year were valued at $602,475,220, or about
twice the like total in 1860, and nearly twelve times
the value of shipments abroad in 1795. Importa-
tions in 1877 were valued at $451,323,126, an in-
crease of forty per cent, over the total in 1860, and
nearly seven times the aggregate value in 1795.
From 1877 a rapid expansion in the volume of our
domestic and foreign trade took place, not only in
exportations of cereal and other domestic products,
but owing to the extension of our railroad system
and the diversification and development of our
manufacturing industries. Over-speculation in finan-
cial circles brought on the panic of 1884, which
was followed by a reaction in business, and after that
came a wide expansion of trade in 1 890, 1 89 1 , and
1892, followed by the panic of two years ago.
In the fiscal year 1894, one hundred years after,
the total value of exports amounted to $1,019,572,-
873, forty per cent, more than in 1877, three times
the value of shipments abroad in 1860, and more
than twenty-one times the total value of our exports
in 1795. The aggregate value of importations into
the United States in 1894 was $740,730,822, an in-
crease of sixty per cent, as compared with 1877,
more than double the corresponding total in 1860,
and eleven times the total value of importations in
'795-
An indication of the grand total value of the in-
terior and exterior commerce of the United States
must be an approximation only, owing to the dearth
of statistics. One hundred years ago the total
value of imports and exports amounted to only
$117,745,730, but in 1894 like totals aggregated
$1,760,203,695, or fifteen times as much. While
there are not the necessary data to indicate closely
the total volume of our domestic trade at the close of
the last century, there is, of course, much, although
incomplete, information bearing upon the interior
traffic of the United States to-day.
44
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Any general estimate of the wealth of the coun-
try at the close of the last century is, of course, de-
ficient when contrasted with census reports on that
subject during the past forty years. The total,
$620,000,000, is the appraisement of the value of
houses and lands one hundred years ago, and must,
of course, overlook much personal property of value,
particularly in that it does not take account of the
value of slaves. But even if one should presume
that, with all allowances for this and other omitted
items, the grand total was as much as $900,000,000,
the contrast with the total wealth of the country in
1850, after half a century of growth, was startling
indeed, showing an increase of nearly eightfold.
By 1860 we had more than doubled the material
resources of 1850. The ratio of gain from 1795 to
1860 (when the total was $16,157,000,000), was still
more remarkable, showing more than sixteen times
the total at the close of the last century. From
1860 onward the increase of national wealth was so
rapid that comparisons with the beginning of the
century become fairly amazing. The increase by
1870 was nearly twenty-seven to one, in 1880 nearly
forty-nine to one, and in 1890, less than a century
having elapsed, the total wealth of the country was
nearly seventy-five times that in 1795, the census
placing it at $65,037,000,000.
When it comes to the development of our trans-
portation interests by land and water, the record of
expansion of our railroad traffic within sixty years is
seen to surpass that of the remainder of the civilized
world, with 178,000 miles of main line of railways,
$5,075,000,000 of capital stock, $5,665,000,000 of
funded indebtedness, $1,080,000,000 of gross an-
nual earnings, and net traffic earnings of $322,000,-
ooo per annum, the railways having transported
about 675,000,000 tons of freight alone in 1894.
Our marine transportation interests, notwithstanding
the check since the Civil War, present a total of
25>54° craft registered at United States interior
cities and ports, sailing from the Pacific, Gulf,
and Atlantic coasts, on the Mississippi, Ohio, and
Monongahela rivers, and on the Great Lakes, valued
at $215,000,000. Freight transportation on the
Mississippi, Ohio, and Monongahela rivers in 1894
did not vary much from 22,000,000 tons, or a little
more than half that estimated to have been carried
on the Great Lakes, where the total was about 40,-
000,000 tons. On the Erie and tributary canals the
total tonnage last year probably amounted to about
one tenth that on the Great Lakes, or 4,000,000
tons, which would leave probably not to exceed
125,000,000 tons of freight carried seaward per
annum in vessels registered at the United States
ports. This indicates that the total freight tonnage
transported by water on the Mississippi, Ohio, and
Monongahela rivers, on the Great Lakes and the
Erie Canal, and seaward on vessels registered at
United States ports, is less than one third the weight
of freight transported by the railways of the country
each year.
Another evidence of the rapidity of the growth of
the wealth of the country is conveyed in the fact
that, whereas the government receipts in 1795
amounted to only $9,419,802, last year they aggre-
gated $313,310,166, more than thirty-four times as
much ; and while the expenditures of the govern-
ment in 1795 amounted to $10,435,070, last year
they were more than thirty-five times as much —
$356,135,215. On the other side, there was a pub-
lic debt of $80,747,587 one hundred years ago (a
dozen or more years after the close of the Revo-
lutionary War), while on December i, 1895, the net
national debt was not quite fourteen times as large,
amounting to only $1,125,883,997. The signifi-
cance of this exhibit lies in the fact that notwith-
standing the enormous expense involved in four
years of Civil War — three decades ago ; notwith-
standing the consequent check to commercial and
industrial enterprise in those and in succeeding years
of rehabilitation, yet so great were our powers of re-
cuperation, and so remarkable was the ability of the
nation to liquidate its enormous war debt, that we
find ourselves to-day with a national debt of only
$16 per capita, as contrasted with one of $18 per
capita one hundred years ago — a dozen years after
the close of the War of the Revolution. These
facts in reference to the relative national indebted-
ness, at once interesting as well as instructive, gather
significance when viewed in conjunction with best
obtainable data respecting the wealth of the country
one hundred years ago and to-day. The strength of
our position may be expressed in the statement that
whereas our national debt amounted to $18 per
capita at the close of the last century, and our
national wealth approximately to $200 per capita-
to-day the national debt is only $16 per capita, and
the wealth per individual somewhat more than
$1000. The postal service, of modest propor-
tions in 1795, had already begun to show remark-
able growth, for from the time the Constitution went
into effect the number of post-offices had grown
from 75 to 453. At this time there are more than
70,000 post-offices in the country, and the revenue
and expenses have increased in almost as great a
ratio.
CHARLES F. CLARK.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Recognizing the many and diverse elements in-
volved in any discussion of the volume of domestic
trade, it remains to be pointed out that the total
amount of gross earnings of railroads in the United
States in 1894 amounted to $1,080,305,000, or $61,-
000,000 more than the total volume of our exports
of produce, coin, and bullion for that year, and
more than twice the volume of gross railway earn-
ings in 1877, seventeen years ago.
The foregoing outline of some of the more im-
portant elements involved in any consideration of
the development of the commerce and the wealth of
the United States during the past century must for-
ever stand out conspicuously, as indicating a rapidity
and withal a conservatism of growth on the part of
a new empire the like of which the world has never
seen.
Perhaps as fair an indication, within limitations,
of our total volume of wholesale business, foreign
and domestic, is that given by totals of transactions
at clearing-house banks — about 1000 in number —
at nearly eighty of the more important cities. Dur-
ing 1894 the grand total of bank clearings aggre-
gated nearly $45,000,000,000, although the corre-
sponding total two years before amounted to nearly
$62,000,000,000, the largest annual aggregate re-
ported since clearing-house totals have been col-
lected. These transactions represent, for the most
part, wholesale dealings at nearly all the larger towns
and cities throughout the country, and, to a smaller
extent, retail transactions in that portion of the busi-
ness of the country which are settled with checks.
It would not be so bold a stroke as it might ap-
pear to estimate the probable approximate grand
total of business transacted annually, not only
through the banks, but across counters, both whole-
sale and retail. The average total of bank clearings
annually during the past five years has been about
$55,000,000,000, or thirty-two times the total value
of our exports and imports, including coin and bul-
lion, in the fiscal year 1894. This indicates in some
degree the enormous preponderance in the value of
our total commercial and industrial transactions, as
compared with that portion carried on with foreign
countries. It would be difficult to conceive of the
total value of all our domestic and foreign commerce
(judged by bank-clearing totals and other available
data) as averaging less than $70,000,000,000 annu-
ally, and probably a larger sum would be required
to gauge it.
Perhaps as striking an indication of the enormous
expansion of wealth and business in the United States
within one hundred years as any other is found in
the statement that whereas the approximate total
banking capital of the country in 1 795 was about
$12,000,000, the total capital of national and other
banks two years ago, as reported by the comptroller
of the currency, amounted to $1,067,000,000, in
addition to which there were reported belonging to
the banks $686,000,000 of surpluses and profits.
From this it would appear that whereas the total avail-
able banking capital of the country one hundred
years ago was only about $2.65 per capita, the pro-
portion per capita two years ago was only about six
times as much. Yet the banking capital of the
country two years ago was about eighty-nine times
the amount in 1795. It may strike many as
remarkable that, whereas the population has in-
creased fifteen-fold, the volume of business probably
thirty-three times, and the wealth of the country more
than seventy-five times within the last one hundred
years the total banking capital is, in round num-
bers, only about six times as much per capita to-day
as at the close of the last century. The lesson
taught by this is most timely in this day of ex-
cessive and frequently unnecessary fears that the
volume of the currency of the country will not be
maintained at the maximum. The development of
the clearing-house principle in business, the syste-
matic organization and wide-spread distribution of
credits of merchants and manufacturers, together
with the enormously increased use of checks, drafts,
and bills of exchange, — representatives of credit, —
are practically responsible for the ability of the banks
to do the enormous business of the country on only
six times the banking capital per capita they pos-
sessed one hundred years ago.
With the tenfold increase in populated area of the
country our population is fifteen times as large as it
was at the close of the last century, while the in-
creasing complexity of governmental administration
has increased total receipts from customs and inter-
nal revenue thirty-four times and expenses thirty-
five times what they were in 1795. It may be no
more than a coincidence, but it is certainly note-
worthy that an increase of 1500 per cent, in popula-
tion has brought with it almost the same increase
in the total annual volume of exports and imports.
The fact that total gross railway earnings have
doubled in seventeen years is far less significant than
that they are in excess of the total volume of our
exports of merchandise, produce, coin, and bullion.
But of even greater interest is the fact that the an-
nual volume of bank clearings at about eighty cities
throughout the United States indicates a grand total
of domestic and foreign trade probably forty times
46
ONE HUNDRED YEARS OF AMERICAN COMMERCE
greater than the total value of exports and of im-
ports. There remains only to be recalled the in-
crease of our interior commerce to thirty-eight
times the volume of our business with foreign
countries, over and above which is the picture
of the total wealth of the country— nearly seventy-
five times what it was at the beginning of the
century.
In thus concluding a hurried and necessarily brief
review of some of the more salient features of the
development of the wealth, trade, and manufactur-
ing industries of the United States, the suggestion
is almost involuntary that there still remains, in spite
of much that has been accomplished in recording our
material advancement, an opportunity for perfecting
and supplying systems by which records may be
kept of various spheres of activity. It is a matter
of regret that more definite information is not ob-
tainable respecting what should go to make up an
accurate estimate of the total volume of the trade of
the country. It is highly probable that estimates
and calculations presented herewith get as close to
the fact as practicable, yet much might be done
were statistics affecting trading, transportation, and
banking compiled and prepared with the system
and comprehensiveness which mark reports of the
Census Department on manufacturing industries of
the country.
CHAPTER VIII
THE CORPORATION IN COMMERCE
THE word "corporation" is comprehensive.
Every nation, every State, every city, town,
and village, is a corporation. Every parish
and every similar church society is a corporation,
and so are most of our colleges and institutions of
learning. The history of such corporations during
the last hundred years, interwoven as it is with our
national development, would fill volumes ; but in this
article the writer must confine himself to some re-
marks upon the corporation with which we are famil-
iar in business — the ordinary joint-stock corporation,
operated for the profit of the shareholders. The part
played by such corporations in the history of the
last century of American commerce is a conspicuous
one, and a concise historical sketch of this impor-
tant form of business organization, giving a brief
glimpse at its remarkable growth, together with
some reflections as to its influence upon the business
community and the country at large, should be of
interest.
In 1795 business corporations in America were
small in number and insignificant as to wealth.
There were, to be sure, several banks, a number of
insurance companies, a few turnpike companies,
some stage-coach companies, and some manufac-
turing corporations. The bulk of the business of
the country was conducted, however, by individual
traders or by partnership concerns. With the
growth of trade and the increase in commercial
activity of all sorts the organization of corporations
was speedily resorted to as offering many advan-
tages over the old-fashioned partnership. Among
those advantages is the opportunity afforded to all
to embark such part of their property as they may
choose in enterprises, whatever they may be, with-
out incurring the liability of general partners; in
other words, a man can invest such sum as he is
willing to lose in the business, with the certainty
that he cannot be compelled to pay anything beyond
that amount toward the debts of the concern.
Then, again, a shareholder in a corporation has his
affairs managed for him by salaried officers, without
care or responsibility on his part.
At first, in order to organize a corporation, legis-
lative action was required in every case. This in
earlier times answered very well ; but this power
was abused, and by and by it was found necessary
to limit the power of the various State legislatures in
this respect. Corporations are, in the eye of the
law, persons,— artificial persons,— and it was found
that a person of this description, having no body to
be imprisoned nor soul to be eternally punished, was
hard to control ; so the legislatures from time to
time passed general laws regulating the formation
and management of corporations, endeavoring in this
way to restrict them as to power, and to force them
to confine themselves each to its own particular
business. Efforts have been made from time to
time by the State legislatures to enact a systematic
code regulating all corporations, with more or less
success ; so now we have in many States a general
law for banking corporations, another for insurance
companies, another for trust companies, another for
railroads, and there are still others. Recently, also,
following the example of the English Parliament,
many of the States have enacted laws under which
corporations may be organized to carry on any
legitimate business, no matter what, not already
provided for by general statutes.
There can be no question that corporate organi-
zation has been of great advantage to the country—
to the poor as well as to the rich. By greater econ-
omy in production, rendered possible by concentra-
tion of capital, the poor have profited in the reduced
price of most of the necessaries and comforts of life.
The reduction in the prices of these articles is a
most interesting subject for study and reflection, and
if space permitted it would be easy to give numer-
ous illustrations. Indeed, it would be hard to find
any considerable number of articles, commonly
47
48
ONE HUNDRED YEARS OF AMERICAN COMMERCE
called comforts or necessaries, the price of which
has not been reduced by the direct influence of cor-
porate management. The comfort and convenience
of all dwellers in this country have been greatly pro-
moted by corporate control of business. Take, for
instance, our facilities for traveling. Again, the
regularity and cheapness of communication by mail,
telegraph, and telephone have only been made pos-
sible by the cooperation of hundreds of corporations
all working together in intelligent harmony. Again,
what could we now do without banks, and without
insurance companies? We owe it to the corpora-
tions that we can protect our property against loss
by fire, and our families from want in the case of
the death of their breadwinner ; and to the savings-
banks that we can safely keep our surplus earnings,
and receive them back again, safe and intact, with
reasonable interest. And so we may sum it all up
in one word and say that the conditions of modern
life would be impossible were it not for the corpora-
tions. Whether sleeping or waking, engaged in busi-
ness or pleasure, eating, drinking, dressing, or trav-
eling, or whatever we may be about, we must thank
them to a great extent for the means and opportu-
nity of doing so.
The reduction in the price of articles of general
consumption, to which reference has been made, is
due, in the writer's opinion, to two causes which in
their operation would at first glance seem calculated
to produce contrary results, but which, in fact, both
tend to the same end. These two causes are com-
petition and consolidation. It is easy to see how
competition between two or more concerns engaged
in the production of an article would tend to lower
its price until a point should be reached when but a
narrow margin of profit would remain. The con-
solidation, on the other hand, of all the competing
concerns engaged in the same business would seem
to tend to an advance in the price of the commodity
produced. This would doubtless be the case at first.
But experience has shown that there is more money
in selling a large quantity at a small profit than in
selling a small quantity at a large profit, and the
application of this principle results, as has been said
above, in the ultimate reduction of the price. A
most notable instance of this truth is to be found
in the enormous reduction of the price of kerosene-
oil since the consolidation into one company of the
various corporations engaged in its production.
How great have been the advantages to our
commerce and our country's development from cor-
porate organization no one can say. Have these
advantages been to some extent counterbalanced by
certain evils? The concentration of wealth in the
hands of corporations has had the effect of driving
the individual producer out of business. In the
early days of our country's existence many industries
were carried on in the towns and villages by skilled
workmen who were their own masters, and who
were in business for themselves. Tailors, shoe-
makers, weavers, blacksmiths, tinsmiths, saddlers,
and many other manufacturers on a small scale
carried on their business for their own account, and
were a useful, self-reliant, and manly element in our
population. These industries are now to a great
extent monopolized by large corporations, and the
men who were formerly independent in their busi-
ness are now represented by salaried workmen.
The gradual extinction of this class of men of mod-
erate means who carried on their business for their
own account seems to be a distinct loss to the com-
munity.
In the earlier days of the history of this country
our foreign commerce was entirely, or almost en-
tirely, in the hands of individual traders and private
partnerships. The vessels by means of which the
trade was carried on were owned by individuals,
the ownership of a vessel being divided sometimes
among a number of persons, the captain in many
cases being a part owner. The cargo of the vessel,
on its arrival at its port of destination, was disposed
of by the captain or by a supercargo for the benefit
of the owners, and the proceeds invested at his dis-
cretion in the return cargo. This method of doing
business afforded a good field for the exercise of
individual skill, and the profits made by those en-
gaged in it were far in excess of anything that can
be realized by traders of the present day. The sub-
marine cables going to all parts of the world, owned
by corporations, have entirely revolutionized our
foreign trade. Our individual ship owners have
nearly all retired from the business, and the carrying
trade of the country is done by steam-vessels owned
by corporations, and, sad to say, nearly all of them
are owned by foreign capitalists and manned by
foreign sailors. No doubt the greatest good of the
greatest number is promoted by the operation of
great industries in corporate hands. The cost of
living is reduced ; but the disappearance from the
ocean of American ships commanded by American
skippers and manned by American sailors is a dis-
tinct misfortune. Whether this disappearance can
fairly be traced, altogether or in part, to the influence
of corporate organizations is a question which can
never be answered. It is perhaps partly due to this
cause and partly to other causes, just as the concen-
WILLIAM JAY.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
tration of business above referred to in the hands of
large corporations and wealthy people is partly due
to corporate organizations and partly to the improve-
ments in methods and machinery introduced by the
inventive genius of modern times.
Another evil growing out of the great develop-
ment of corporate control of business is a lower-
ing of the standard of business honor and business
morality. The administration of the affairs of cor-
porations of our country by their directors has in
many instances been unfair to the stockholders, and
to a corresponding extent advantageous to the
directors. It cannot be denied that many large
fortunes have been made by men who availed
themselves of the knowledge acquired by them as
directors of the affairs of corporations to buy and
sell the shares for their own profit. Many a director
in a corporation would consider it preposterous to
be told that he had no right to trade in the stock
of his corporation, and yet the director is to all in-
tents and purposes a trustee for the stockholders,
and ought not, any more than any other trustee, to
trade in the trust estate. More than this, it has not
been at all uncommon for directors to engage in
transactions with their own company, the result of
which has been greatly to their own advantage.
How many railroad companies have been wrecked
by being saddled with worthless lines with which
they have been consolidated ? Many other instances
might be cited where directors, under form of law,
have bled the corporations for which they were act-
ing. The directorate, for instance, of some great
corporate interest, rightfully active within a certain
field, leases in the form of privileges certain of its
functions to outside corporations, in the success of
which its members are concerned. Valuable con-
cessions, involving thousands of annual revenue, are
granted for the most nominal considerations, and
the tributary companies wax rich and pay large
dividends, while the great corporation whose reve-
nues are thus diverted from its stockholders pays
none at all, and its only beneficiaries are found
among the directors, who have thus misused their
power for their own ends.
Vast sums of money, American and foreign cap-
ital, have been invested in enterprises in this coun-
try under corporate control. A great deal of this
money has been lost to the investor forever. Some
of it has gone because the project in its inception
was ill considered, and the blame must rest upon
the poor judgment of the investor; but too many
schemes have been floated by corporations con-
ceived in fraud, through which confiding investors
have been fleeced. A common form of swindle is
an issue of bonds secured upon nothing but a fran-
chise that has cost the corporation nothing. A
fraction of the proceeds may be used in construc-
tion ; the balance may be, and often has been, dis-
tributed among the promoters. An allusion to this
form of corporate dishonesty is all that space admits
of ; were it not so, it would be instructive to refer
here at some length to the common device of
dishonest directors who contract with so-called con-
struction companies in which they are themselves
the shareholders, thereby reaping a dishonest profit.
The power of corporate organization has been
invoked to work great hardship and wrong in many
cases to the towns and cities throughout the coun-
try. Franchises of enormous value — especially the
right to use the streets for elevated and surface
roads — have been obtained for a most inadequate
consideration. This abuse of power by corporations
has been demoralizing in its tendency and mischiev-
ous in its results. It is impossible to compare our
great cities with those of Europe without feeling
that ours have been vulgarized, degraded, and ren-
dered hideous by the appropriation of their princi-
pal streets by private corporations for private greed.
It is idle to say that public convenience requires
that hideous structures like the elevated railroad
should exist, or that cable-cars should be run on the
surface of our principal thoroughfares. It is not so.
It is not so in any other civilized country on earth,
and would not be tolerated in any other civilized
country. Perhaps we are not so highly civilized as
we think we are.
The corporation is a tremendous power with us,
both for good and evil. It is probable that as time
goes on its powers will increase rather than diminish.
By its means cheaper living, more comfort, and
greater luxury will be brought within the reach of
us all. Let us hope that a higher plane of business
honor may be reached in the management of our
corporations.
CHAPTER IX
COMMERCIAL ORGANIZATIONS
IN the early part of the present century the
commercial organizations then existing which
had any material influence upon the home and
foreign commerce of the nations of the earth were
exceedingly limited in number. Indeed it is doubt-
ful if at that period there were more than fourteen,
viz., three in Great Britain, seven in France, and
four in the United States. All of these, save two
notable exceptions, — the Board of Trade of England
and the Council General of Commerce of Paris, —
were largely synonymous in their vocations and
operations.
In France Chambers of Commerce had been in-
stituted at a very early date — notably at Marseilles,
at the close of the fourteenth or the beginning of
the fifteenth century; at Dunkirk, in 1700; at
Paris, in the same year; at Lyons, in 1702; at
Rouen and Toulouse, in 1703; at Montpellier, in
1704; and at Bordeaux, in 1705. While England
had her Board of Trade as early as 1660, it was not
until 1786 that the present department was estab-
lished in Council, being a permanent committee of
the Privy Council for the consideration of all mat-
ters relating to trade and the colonies, with functions
partly ministerial and partly judicial. Of Chambers
of Commerce, Great Britain then had but two : that
of Glasgow, instituted in 1783, and of Edinburgh,
founded in 1785, and incorporated by royal charter
in 1786.
In the United States the oldest existing Chamber
of Commerce is that of New York, organized in
1768, and incorporated by royal charter in 1770.
Shortly afterward a second was established at New
Haven, Conn. ; another at Charleston, S. C., about
1775 ; and that in Philadelphia in 1802. It is true
that New York about this time had also a Board of
Brokers, organized about 1792 or 1793, and had
erected the Tontine Coffee-House, where merchants
and others met and discussed mercantile and semi-
commercial questions.
The Chamber of Commerce of New York is in
some respects not only the forerunner but the type
of many like institutions which have been organized
in our leading cities, representing, both locally and
otherwise, our multiplying and diversified industrial
interests. In some instances, however, it essentially
differs from other kindred institutions, since, while
caring for local welfare, it is also broadly national
in its sympathies and work. In this connection it
may be interesting to trace back this time-honored
organization to the names of the old and respected
merchants who founded it. They were : John
Cruger, Elias Desbrosses, James Jauncey, Jacob
Walton, Robert Murray, Hugh Wallace, George
Folliot, William Walton, Samuel Verplanck, Theo-
phylact Bache, Thomas White, Miles Sherbrook,
Walter Franklin, Robert Ross Waddell, Acheson
Thompson, Lawrence Kortwright, Thomas Randal,
William McAdam, Isaac Low, Anthony Van Dam,
John Alsop, Philip Livingston, Henry White, and
James McEvers. It also may not be out of place
to reproduce the original terms used in its formal
organization, reciting its usefulness as follows:
"WHEREAS, Mercantile societies have been found
very useful in trading cities for promoting and en-
couraging commerce, supporting industry, adjusting
disputes relative to trade and navigation, and pro-
curing such laws and regulations as may be found
necessary for the benefit of trades in general. . . ."
Of the history and character of the persons who
are here recorded as the original founders of this
Chamber the memories of the present generation
will not be wholly oblivious. The first public place
of meeting of the original Chamber was at the house,
now standing, on the corner of Pearl and Broad
streets. This building had been originally erected
as a town residence, and had undergone many alter-
ations in size and form. During the period of
Washington's first residence in this city it was chiefly
remarkable as being a public tavern, where in later
50
ONE HUNDRED YEARS OF AMERICAN COMMERCE
'•I
days Washington was entertained and took his fare-
well of the officers of the army on his departure for
his home in Virginia at the close of the Revolution-
ary War. The subsequent meetings of the Chamber
were held, first, in 1769, in the "great room of the
building commonly called the ' Exchange,' at the
lower end of the street called Broad " ; afterward, in
1779, at the Merchants' Coffee-House, on the south-
east corner of Wall and Water streets ; in 1 8 1 7 at
the Tontine Coffee-House, on the northwest corner
of Wall and Water streets; in 1827 in the original
Merchants' Exchange (in a room specially set apart
for the purpose), until that building was destroyed
by fire in 1835; then for a time in the directors'
room of the Merchants' Bank on Wall Street ; then
in premises on the corner of William and Cedar
streets, where the Chamber remained for many
years prior to its final removal to its present com-
modious quarters on Nassau Street.
At the close of the Revolution the legislature of
New York passed an act (on the i3th of April,
1784) "to remove doubts concerning the corpora-
tion of the Chamber of Commerce, and to confirm
the rights and privileges thereof." Under this act
the title was changed from the " Chamber of Com-
merce " to the " Chamber of Commerce of the State
of New York." From the earlier days down to the
present period the membership has been principally
confined to citizens engaged in finance and com-
merce, although at different times our records show
that public officers of the highest rank, including
presidents, governors, Senators, Congressmen, for-
eign ministers, and members of the State legislature,
have been either honorary or regular members of
the Chamber of Commerce. In the earlier steps
taken, almost a century ago, to form a code of
commercial laws and regulations, the most prominent
merchants of that era determined and bound them-
selves reciprocally to prevent " the scandalous prac-
tice of smuggling." Within two years after the
evacuation of the city of New York by the British
a strong effort was made in the new State legisla-
ture to adopt a plan for issuing paper money, to be
made by law a legal tender in the transaction of
business. A memorial was adopted by the Cham-
ber, setting forth in the most forcible terms the evils
and immorality of such an issue, and through its in-
fluence the proposed measure was defeated. It may
be safely alleged that to the good sense and active
management of the Chamber may be attributed the
policy which the general government adopted at
this period of peril, whereby the credit of the nation
was maintained. At an early period in the active
movements of the Chamber, in January, 1786, a
resolution was considered asking the assistance of
the legislature of New York for the creation of a
fund to connect the city of New York by artificial
navigation with the lakes. This action clearly con-
nects the sentiments of the Chamber of that early
day with the great purpose of Governor Clinton for
the construction of the Erie Canal. A few years
later we find the Chamber entertaining the project
for the construction of a ship-canal around Niagara
Falls, and a railroad from Lake Erie to the Hudson
River.
The question of tribunals of commerce was also
considered at several periods of its history ; but the
legislature was not friendly to this new departure in
commercial jurisprudence until 1874, when an act
was passed establishing a court of arbitration, to be
presided over by a judge appointed by the gover-
nor ; and this court continues to this day. Another
highly important subject had from time to time
occupied the attention of the Chamber, that of
the pilot laws of New York and New Jersey, result-
ing in the present excellent system. At the annual
meeting in 1848 the Chamber took formal measures
to assist in organizing a savings bank for the benefit
of " merchants' clerks and others " ; and a charter
was granted by the legislature as the result of this
thoughtful action, and since then this institution has
grown to be one of the most successful of similar
organizations in the country. In 1849 tne Chamber
was interested in Whitney's project for the construc-
tion of a Pacific railroad across the continent, and
a report favoring its construction was unanimously
adopted and forwarded to Congress. It was also
instrumental in getting the United States govern-
ment to remove the sunken rocks from the channel
of the East River and to widen the passage through
Hell Gate. In 1852 the Chamber took active mea-
sures in regard to the reciprocity agreement with
the North American provinces for the free inter-
change of the natural productions of the respective
countries, embracing also a full and joint participa-
tion in the fisheries and the free navigation of the
river St. Lawrence. It also repeatedly declared its
sentiments on the subject of privateering, and has
at all times maintained its inviolable determination
to adhere rigidly to the principles avowed by the
government of the United States.
The treaty negotiated with Japan by Commodore
Perry, in behalf of the United States, opened up a
new pathway to commerce with an almost unknown
nation, and the Chamber took a prominent part in
giving signal testimony of its appreciation of that
52
ONE HUNDRED YEARS OF AMERICAN COMMERCE
officer's conduct in a graceful gift of a silver service
of plate. At a special meeting of the Chamber, held
the 2ist of August, 1858, the successful result of the
united efforts of the English and American nations
to lay the first Atlantic telegraph-cable to connect
the continent of the Old World with the New was
announced, and the sum of $10,000 was appropri-
ated and applied to the presentation of gold medals
to the prominent officers engaged in carrying out
the -nterprise. At the meeting of the Chamber,
September 6, 1860, the following resolution was
adopted : "Resolved, That in the judgment of this
Chamber an urgent necessity exists for the establish-
ment, at an early day, of mail facilities between the
cities of San Francisco in California and Shanghai
in China, with connections at such intermediate
ports as the interests of commerce may indicate."
It seems hardly necessary to add that the above is
the germ from which has sprung the magnificent
line of American steamships which traverses the
Pacific Ocean to-day.
A remarkable epoch in the affairs of this country,
and one especially affecting all its business interests,
occurred shortly after this period. The Southern
States of the Union had united in revolt against the
government, and the President had issued his proc-
lamation calling for military aid. The Chamber
responded to this appeal by holding a large and
enthusiastic meeting on April 19, 1861, at which
an ample sum of money was raised to forward at
once for the defense of the national capital two
regiments of the State National Guard, and also to
organize several additional regiments of volunteers,
who left shortly afterward for the seat of war. At
this meeting attention was called to the fact that
a part of the advertised loan of the government
remained untaken. A special committee was ap-
pointed, and the balance, amounting to $8,000,000,
was at once subscribed, and the Treasury Depart-
ment notified that the same could be drawn for at
once. The great mass-meeting at Union Square-
now a matter of history— and the Union Defense
Committee were the outcome of the action of the
Chamber. The valuable aid rendered to the gov-
ernment by this committee, composed, as it was,
mainly of merchants and bankers of New York, was
frequently acknowledged by the highest military
authorities, and sixty-six regiments were equipped
and fitted for service and forwarded in the early
stages of the war, as standing evidences of its loyalty
and efficiency.
At a special meeting of the Chamber held on
May 15, 1872, "to give expression to the views of
the Chamber on the Treaty of Washington (result-
ing in the Geneva award arbitration), and to urge
the ratification by the Senate of an additional article
thereto, as proposed by Minister Schenck," the fol-
lowing preamble and resolutions were adopted :
" WHEREAS, The Treaty of Washington, referring
the differences between this country and Great
Britain to arbitration, has justly been regarded as a
measure of great importance to the interests of civ-
ilization and peace, and the honor of proposing it
belongs to this country; and
"WHEREAS, Differences of opinion have arisen
between the governments of the two countries re-
specting the proper construction of the treaty in
regard to the claims for indirect damages, and a
supplemental article for settlement of those differ-
ences has been proposed by the government of
Great Britain, and by the President laid before the
Senate for its advice, which article appears to this
Chamber to be sound in principle, binding the two
governments to the adoption of a beneficent rule for
the future, and especially beneficial to the United
States and its commerce ; and
" WHEREAS, The failure of the treaty would be a
great public calamity ; therefore
"Resolved, That this Chamber, without meaning
thereby to imply that our government has at all
erred in its construction of the treaty, and believing
that the supplemental article is more than an equiv-
alent for the claims of our government as originally
presented, and feeling the importance of removing
all obstacles in the way of the execution of the
treaty, earnestly recommends the adoption of the
supplemental article, and prays the Senate to ratify
it."
As the Senate was " hanging fire " in regard to
the ratification of this treaty, and war between the
two countries was apparently imminent, the action
of the Chamber in this matter was not only timely
and praiseworthy, but also wise, patriotic, and in-
fluential, as the sequel showed.
Thus it will be seen that to outline the history
and operations of the New York Chamber of Com-
merce is largely to portray the political, commer-
cial, industrial, and financial development of the
country ; for really no great politico-economic ques-
tion has arisen in the United States from the War
of 1812—15 *° the present time in which it has not
been vitally and patriotically interested. The fore-
going are, however, but few of the services which it
has so signally performed. It has been concerned
in nearly everything which related to the commer-
cial welfare and prosperity not only of the city and
ALEXANDER E. ORR.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
State of New York, but also of the country at large,
of which it is in a measure the commercial guardian.
The class of people who possessed the most
means and experience before and immediately after
the Revolution were the merchants and ship owners,
and they were the first to perceive the advantages
and value of mercantile or commercial organizations,
which, as already outlined, they perfected in New
York, New Haven, Charleston, and Philadelphia.
These commercial bodies were the initial organiza-
tions of the kind in America. Their foundations
were broad and deep, and each in its way and time
performed substantial service for the public good,
both local and general. The Chamber of Com-
merce of Baltimore, instituted in the early decades
of the century, but subsequently reorganized as the
Board of Trade, still continues its usefulness. The
Merchants' Exchanges of New York and Philadel-
phia, which were founded at an earlier date, have
passed away, probably from having been too heavily
handicapped at first with expensive buildings and in-
adequate revenues.
Succeeding the War of 1812-15, an<3 later, other
Chambers of Commerce, Exchanges, and Boards
of Trade were organized in various cities of the
Union, which also have done much toward develop-
ing the industries, trade, and traffic of their locali-
ties, as well as taking more or less active part in
promoting the general commercial welfare of the
country. But the commercial associations which
are the most numerous, and withal the strongest, are
those founded by people who deal in like things in
towns or cities which are to some extent centers of
particular callings, such as cotton in New Orleans,
leather or wool in Boston, iron in Philadelphia,
crockery in Trenton, paper in Holyoke, or print
cloths in Fall River or Providence. Among the
earliest of the general Boards of Trade which still
retain their vitality, and form an important element
in the town or city in which they are located, is the
Chicago Board of Trade, which came into existence
on March 13, 1848, but did not begin business until
May 2, 1850. From the beginning it has been an im-
portant center for grain, animal-food products, and
lumber. Similar boards were established in Detroit,
Milwaukee, Cincinnati, St. Louis, Toledo, Minne-
apolis, and other Western cities. That in St. Louis
is also an important center for the cotton trade.
Smaller organizations exist in towns numbering less
than 10,000 inhabitants, and have proved valuable
adjuncts by the infusion of greater local pride and
energy among their citizens.
Next to the New York Chamber of Commerce is
the Associated Board of Trade of Boston. Thi» u
probably the best representative body among strictly
business associations in this country. Founded on
a new idea or plan, it has so demonstrated, during
the few years of its existence, its great practicability
and usefulness as to become the exemplar of the
newer Boards of Trade throughout the country.
The Boston Associated Board of Trade is not a
promiscuous grouping of business men coming to-
gether as individuals, but is made up of delegates
from the various regularly organized trade associa-
tions of that city, these representatives being duly
elected by their own organizations, and attending
the Associated Board of Trade meetings, to speak
and act not only for themselves, but as voicing the
wishes of the associations which send them. Thus,
when the members of the Associated Board of
Trade make a decision, their action is at once of
importance (because of its comprehensiveness) in
forming commercial and legislative opinion.
As New York is the commercial metropolis of the
United States, her merchants, of necessity, must be
equally comprehensive in their dealings not only in
home products, but also in those of all other coun-
tries with whom they hold commercial relations.
To facilitate the operation of this great concentra-
tion of business it was found expedient to organize
separate Exchanges and Boards of Trade, which as
time passed have grown into large proportions. It is
impossible in this short article to describe them all,
— some seventy in number, — but a few of the more
prominent may be mentioned. The New York
Produce Exchange, with its 3000 members, specially
deals in grain, flour, provisions, lard, tallow, etc.
It possesses the finest exchange building in the
United States, and its business and influence are
proportionally great in the line of its specialties.
The Stock Exchange confines its dealings to stocks
and bonds and other similar securities of this and
other countries, and has given great impetus to the
development of transportation in this country. The
Cotton Exchange, which deals almost exclusively in
that staple, buys and sells more cotton for future
delivery than any other Cotton Exchange either at
home or abroad. The Petroleum— now the Con-
solidated— Exchange first dealt in petroleum and
mineral oils, but of late years it has turned its atten-
tion to stock securities, and is to some extent a
competitor of the Stock Exchange. The Coffee
Exchange has lately grown into very great promi-
nence, and now surpasses in the volume of its busi-
ness that of Havre, France, which is believed to be
the largest in Europe. The Merchants' Exchange
54
ONE HUNDRED YEARS OF AMERICAN COMMERCE
confines its operations to farm products, such as
butter, cheese, eggs, poultry, and the like, and now
aggregates an enormous business. The Wool Ex-
change and the Metal Exchange are other important
associations, which, with the foregoing, own their
buildings ; but besides these there are the Maritime
ber of such organizations throughout the whole coun-
try will probably reach 2000.
The national and trade associations probably
aggregate in number over one hundred. Following
is a list of prominent national organizations, and
their leading officers at the present time :
NATIONAL COMMERCIAL ASSOCIATIONS.
NAME.
LOCATION.
PRESIDENT.
SECRETARY.
American Association of Flint and Lime Glass Manu- ?
facturers _ 5
American Boiler Manufacturers' Association of the
United States and Canada 5
American Iron and Steel Association
Association of Iron and Steel Sheet Manufacturers
Carriage Builders' National Association
Heavy Hardware Jobbers' National Union
Manufacturers' National Association
Merchant Tailors' National Exchange of the United J
States 5
Millers' National Association of the United States
National Association of Builders
National Association of Furniture Manufacturers
National Association of Galvanized Sheet-Iron Manu- )
facturers 5
National Association of Stove Manufacturers
National Association of Wool Manufacturers
National Board of Trade
National Board of Trade of Cycle Manufacturers
National Brick Manufacturers' Association of the ?
United States J
National Cigar Manufacturers' Association
National Confectioners' Association
National Dairy Union
National Hardware Association
National Iron Roofing Association
National Live Stock Exchange
National Paint, Oil, and Varnish Association
National Retail Grocers' Association
National Retail Hardware Dealers' Association
National Retail Jewelers' Association of the United ?
States J
National Transportation Association
National Wholesale Druggists' Association
Tinned Plate Manufacturers' Association of the ?
United States j
United States Brewers' Association
Vapor Stove Manufacturers' Association
Vessel Owners' and Captains' National Association . . .
Pittsburg, Pa.
St. Louis, Mo
Philadelphia, Pa. . .
Pittsburg, Pa
Philadelphia, Pa. . .
Chicago, III
Cincinnati, O
New York
Milwaukee, Wis. . .
Boston, Mass
Indianapolis, Ind. .
Pittsburg, Pa
Chicago, 111
Boston, Mass
Boston, Mass
Hartford, Conn. . . .
Indianapolis, Ind..
New York, N. Y. .
St. Louis, Mo
Elgin, 111
Philadelphia, Pa. . .
Cincinnati, O
Chicago, 111
Chicago, 111
Chicago, 111
Boston, Mass
St. Louis, Mo
Chicago, III
Minneapolis, Minn.
Pittsburg, Pa
New York, N. Y. . ,
Cleveland, O
Boston, Mass
George W. Blair, Pittsburg, Pa.
H. S. Robinson, Boston, Mass.
B. F. Jones, Pittsburg, Pa.
J. G. Battelle, Piqua, O.
Channing M. Britton, New York.
S. D. Kirnbart, Chicago.
Thomas Dolan, Philadelphia.
Emile Twyeffort, New York.
C. A. Pillsbury, Minneapolis, Minn.
Charles A. Rupp, Buffalo, N. Y.
Otto Strechhlan, Indianapolis, Ind.
N. S. Whitaker, Wheeling, W. Va.
Lazard Kahn, Hamilton, O.
William H. Haile, Springfield, Mass.
Frederick Fraley, Philadelphia, Pa.
A. G. Spalding, New York.
F. H. Eggers, Cleveland, O.
Moses Krohn, Cincinnati, O.
John S. Gray, Detroit, Mich.
W. D. Hoard, Fort Atkinson, Wis.
< William W. Supplee, 503 Market
< St., Philadelphia, Pa.
James Beichele, Canton, O.
W. H. Thompson, Jr., Chicago, 111.
< Howard B. French, Philadelphia,
i Pa-
George A. Shurer, Peoria, IU.
S. S. Bryan, Titusville, Pa.
Herman Mauch, St. Louis, Mo.
Frank Barry, Milwaukee, Wis.
J. C. Eliel, Minneapolis, Minn.
W. T. Graham, Bridgeport, O.
Leo Ebert, Ironton, O.
C Hon. D. Dangler, Dangler Stove
\ Mfg. Co., Cleveland, O.
J. S. Winslow, Portland, Me.
George F. Easton, Pittsburg, Pa.
C E. D. Meier, 421 Olive St., St.
( Louis, Mo.
C James M. Swank, Gen. Man
I Philadelphia, Pa.
John Jarrett, Pittsburg, Pa.
Henry C. McLear,Wilmington,Del.
5 W. C. Brown, 45 La Salle St, Chi-
_> cago, 111.
E. P. Wilson. Cincinnati, O.
James S. Burbank, New York.
Frank Barry, Milwaukee, Wis.
William H. Say ward, Boston, Mass.
T. B. Laycock, Indianapolis, Ind.
John Jarrett, Pittsburg, Pa.
T. J. Hogan, Chicago, 111.
S. N. D. North, Boston, Mass.
W. R. Tucker, Philadelphia, Pa.
A. Kennedy Child, Hartford, Conn.
C Theo. A. Randall, 5 Monument
\ Place, Indianapolis, Ind.
Morris S. Wise, New York.
C F. D. Seward, 525 North Main
) St., St. Louis, Mo.
D. W. Willson, Elgin, 111.
T. James Fernley, 505 Commerce
St., Philadelphia, Pa.
George M. Verity, care American
Roofing Co., Cincinnati, O.
arles W. Baker, Chicago, 111.
!• D. Van Ness Person, Chicago, III
W. M. Crawford, Chicago, 111.
Hiram G. Janvrin, 9 Dock Square,
Boston, Mass,
illiam F. Kemper, St. Louis, Mo.
George F. Stone, Chicago, 111.
A. B. Merriam, Minneapolis, Minn.
John Jarrett, Pittsburg, Pa.
Richard Katzenmayer, New York.
F. L. Alcott, Standard Lighting Co.,
Cleveland, Ohio.
C R. R. Freeman, 95 Commercial
) St., Boston, Mass.
i:
Exchange, the Board of Trade and Transportation,
the Coal Exchange, the Mechanics' Exchange, and
many more with names indicative of their trade spe-
cialties, which have organized from time to time as
the city developed.
The approximate numbers of the various commer-
cial associations located in the principal cities, not
previously enumerated, are as follows : Philadelphia,
20; Boston, 48; Pittsburg, n ; Baltimore, 21 ; San
Francisco, 15; Indianapolis, 8; Louisville, 9; New
Orleans, n ; Minneapolis, 12 ; Kansas City, 9; St.
Louis, 26 ; Omaha, 9 ; Buffalo, 16 ; Cincinnati, 17 ;
Cleveland, 9 ; Milwaukee, 10 ; and the entire num-
Thus it will be seen that, starting with but four
commercial organizations, of the character and scope
outlined, at the beginning of the nineteenth century,
their number at its close will have increased five
hundred fold. What they have accomplished for
the people of this country is simply incalculable.
The record is found in our extensive manufacturing
industries ; in the products of the soil, forests, and
mines ; in our enormous interstate commerce ; in
our foreign trade ; in our circulating medium and
monetary institutions ; and, finally, in the unprece-
dented increase in national wealth, prosperity, and
development.
CHAPTER X
ONE HUNDRED YEARS OF NEW YORK COMMERCE
INEVITABLE from the first as was the suprem-
acy of New York in the commerce of the Western
world, her preeminence to-day has largely been
attained along the lines of her own endeavor. Com-
peting in the open fields of enterprise and trade, she
fairly won the wealth that has rendered possible the
ever-increasing magnitude of her operations. Her
later progress is linked to that of the nation by the
double and indissoluble bond of cause and effect.
To the geographical location of New York have
been attributed, and to a certain extent justly, the
great advantages she enjoys over every other city
on the Atlantic seaboard. Her harbor is one of the
largest and safest in the world. It is never closed
by ice, and is always easy of access. Situated at
the mouth of that great inland waterway, the Hud-
son, the island of Manhattan affords a shore front
capable of docking the navies of the world, while
Long Island Sound, a miniature Mediterranean,
stretches far away to the east. Great trunk-lines,
tapping the vast resources of every part of the coun-
try, bring here the products which are later distrib-
uted over the whole habitable globe. This is the
condition of affairs to-day ; but there was an era,
prior to the railroads, when small vessels of far lighter
draft demanded spacious harbors, and when, the
manufacturing interests of the country being unde-
veloped, natural products alone sought the markets
of the world.
This was the time, a century ago, when New York
won her spurs. With a population of about 50,000,
she held her claim to commercial and metropolitan
honors only by contention. Philadelphia, Baltimore,
New Orleans, and even Charleston represented in-
terests as important as those which centered upon
Manhattan Island. Cotton was then an infant
monarch of little power, but the plantation interests
of the South, which were striding daily into promi-
nence, centered at Baltimore and Charleston ; the
great highway of the Mississippi was already begin-
ning to take the products of the West to New Or-
leans ; while Philadelphia, with her great banking in-
terests, and New England, with her flourishing West
Indian trade, were further challenging New York.
Of the total commerce of the country, New York
had only about one fourth credited to her. Singu-
larly enough, it differed but little in its import fea-
tures from that of to-day. The causes of this are
not hard to discover. The mercantile interests of
the city were already developed. Her social life
differed only in degree from that of the European
capitals, and wealth and luxury were found every-
where. The old aristocratic flavor of the colonial
days still remained, and in politics alone was found
the dominant democracy of the time. Gentlemen's
cellars still nursed in dusty bins the choicest wines
of sunny France, of Portugal, and of Madeira, which
made the invoice of many an arriving merchantman.
Olives, oil, dried fruits, and hundreds of other luxu-
ries came from the Mediterranean ports, while coffee,
sugar, spices, indigo, dyestuffs, and other tropical
products arrived from the West Indies and from
the Orient. Cloth and manufactured articles of
all kinds for the use of New York were brought
from England and France, and with the other
imports were traded for the wheat, flour, corn,
beef, fish, provisions, furs, lumber, and tobacco which
our own country sent here for a market. Very little
money, generally speaking, changed hands. Com-
merce resembled more an extended application of
the barter system of the early trading-post than an
international business relation.
To this brief rdsume" of the situation as it pre-
sented itself to the bewigged old gentlemen who
gathered daily at the so-called Merchants' Exchange
in the Tontine Coffee-House during the early days
of the year 1795, only one thing remains to be
added. This was the extreme insecurity of our
commercial relations, which dashed the otherwise
legitimate undertakings of our merchants with a
55
56
ONE HUNDRED YEARS OF AMERICAN COMMERCE
speculative savor found to-day only in the stock
market. England in 1783 was unable longer to
withhold political liberty, but a dozen years later
she still endeavored to hold on to many of the ma-
terial advantages of colonial days.
The first step toward removing the obstructions
which embarrassed our commerce was the Jay
treaty. The successful negotiation of this first of
our commercial treaties, imperfect though it was,
well deserves centennial celebration. It marks our
admission as a nation into the world's fraternity of
commerce.
Many a famous fortune of to-day, and many a
great business house since known all over the civ-
ilized world, were founded in the next decade. At
this time New York was scarcely half as large as
Philadelphia. Its merchants, who to-day would be
called importers, and its retail storekeepers, trans-
acted the business of the town. There were no
manufacturing interests, and even in 1800 this
branch of industry had only reached an annual out-
put of about $250,000, a large part of which was
accredited to brewing and distilling. When it is
considered that to-day New York's factories turn out
annually over $600,000,000 worth of goods, the sig-
nificance of the change from the condition in which
they started will be better appreciated.
The city of New York during this period extended
only about to Reade Street or Duane Street, and
above Canal Street was still the open country. The
docks were in the southeastern part of the island,
beginning at Whitehall Street and running around
to Peck Slip. Above these, all along the shore,
were the shipyards, which were the first to feel the
impetus of the good times that were inaugurated in
1795. Those were the days when a few hundred
dollars built a stanch little vessel. Her hull was
easily mortgaged for so much as would supply her
with sails and rigging, and the profits of her first
voyage to the West Indies were such that she would
tie up to the home dock completely paid for.
Through the activity of trade the ship-builder and
the merchant prince reached a prominence never
before gained by any class in the community. With
the exception of the farmers, they were almost the
only employers of labor. It was an age which, with
all its simplicity, affected a lavishness of living ex-
penditure, and these nabobs spent their money as
freely as they made it. Their argosies came back
to them laden with all the latest products of Euro-
pean industry and skill. Their warehouses, filled
to overflowing, poured into the empty holds of these
vessels great cargoes of grain, breadstuffs, fish, and
provisions, which were carried to Europe, laid waste
by Napoleon and his French legions, and which
brought fabulous prices. Return cargoes, sold at
enormous profit here, still further added to the lu-
crative nature of this early trade, and the merchants
of New York improved their time to accumulate
wealth without interruption until the Embargo of
President Jefferson in 1807.
In the mean time, however, many things were
happening which were later to produce their effect
upon the trade of New York. These causes had
already begun to shape themselves in 1800. The
population of the city was then 60,489, and it was
distinctly commercial and maritime in its nature.
The offices of the largest merchants, the three banks,
the three insurance companies, and all the business
energy of the city had centered about Wall Street,
excepting the shops and smaller retail establishments,
which lined Pearl Street, making it a main thorough-
fare then and for thirty-five years thereafter. The
coastwise and inland trade had brought to the docks
sloops and quaint old craft in shoals from New Jer-
sey, up the Hudson, and along the Sound, which
brought firewood, brick, farm produce, and other
articles, and took away general supplies. Further
than this, a large fishing-fleet made this port its
headquarters, and its season's catch, dried and
salted, continued for many years to be an important
part of our exports.
Of manufactured articles, except the very coarsest
grades, we produced almost none at that time ; but
under the fostering of the Embargo and the war
blockade there came a great manufacturing move-
ment, which continued for a period of three years.
In 1 800 attempts were made for industrial indepen-
dence in many branches. The iron-working indus-
try, always prohibited by England to the colonies,
was begun in a minor way in New York by such
men as Robert McQueen, James P. Allaire, and
others. Pianos, soon to become an essential in the
drawing-rooms of all cultivated people, were among
the earliest of American manufactures. Dodds &
Claus, the first firm engaged in this business, were
making them as early as 1792 at 66 Queen Street,
now a part of Pearl. Besides this most important
branch, New York's other industries were two or
three hat factories, which employed a few hands at
cheap wages, and several breweries, distilleries, and
tanneries. The trade in furs, too, was extensive at
this time, and John Jacob Astor soon after organ-
ized a single company, with a capital, enormous for
those days, of $1,000,000, the greater part of which
was furnished by him. He further increased his
HORACE PORTER.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
67
operations a few years later by absorbing two other
companies, and establishing a Western depot on the
Columbia River. With the exception of this latter
enterprise, which soon failed, his business was in
New York.
Europe during all this period was torn by the
struggles of those national giants, France and Eng-
land. Each of the combatants had proclaimed a
blockade against all European ports except those
under its own control, and any merchantman flying
the United States flag was liable to confiscation, if
caught by a patroling cruiser or privateer of either
nation near the blockaded coast. Many ships were
lost in this way ; but the enormous profits gained
when a vessel managed to slip a cargo through were
so tempting that New York merchants continued to
embark in such ventures. It was at this time that,
protest having proved unavailing, President Jefferson
believed himself to have found a way to force the
belligerent powers to respect the neutrality rights of
America. To this end he issued in 1807 his Em-
bargo, prohibiting all American merchantmen from
leaving port, and forbidding the shipment of Ameri-
can cargoes in foreign bottoms. It was his belief
that Europe's need of the provisions this country
supplied would drive her to conciliation. In this
idea he proved mistaken, and the Embargo was
necessarily repealed in 1809. It had, however,
accomplished great mischief to New York's com-
merce, as well as to that of the country at large.
The great fleets of the merchant princes lay rotting
at their anchorages. The warehouses were deserted,
and grass grew upon the unused docks. Many
clerks were discharged, and their poverty, together
with that of hundreds of sailors thrown out of em-
ployment, made the suffering among the laboring
class severely felt.
The most important event of this time, however,
and one that far outranks the Embargo in its con-
tinuing importance, was the building by Robert
Fulton of the Clermont, the first steamboat, though
it was little more than a toy. He was aided with
means by Chancellor Livingston. At a speed of
between four and five miles an hour the little vessel
made the trip to Albany and return, thus inaugurat-
ing the present era of steam-navigation. She was
speedily followed by others. Steamboats were run-
ning on Long Island Sound in 1818, and the fol-
lowing year John C. Stevens, of Hoboken, built
the steamer Savannah, of 380 tons, which was the
first steam-vessel to cross the Atlantic. Ten years
later there were fifty steam-packets running into
New York harbor, and in 1840 the first regular
transatlantic steamers were started by the Cunard
Line.
The repeal of the Embargo in 1809 had scarcely
time to bring about any great results before die War
of 1812; and an immediate blockade by a British
fleet of the port of New York again locked up the
city within the narrowest limits, even her coastwise
trade being stopped. Much distress resulted in the
winter from the lack of firewood ordinarily brought
by the Jersey sloops. The blockade, too, had an
added severity over the Embargo, in the fact that,
being a community dependent upon England for
goods, we were suddenly cut off from our supply,
and found ourselves without means at home to rem-
edy the deficiency. Then it was that the attention
of New York was for the first time turned seriously
toward manufacturing. Homespun, although worn
in the country at large, would scarcely do for the
fashionable people in New York ; and all the hundred
and one conveniences demanded by dwellers in
city and country must be supplied. In response to
this demand factories sprang up as if by magic.
Especially wonderful was the sudden growth when
it is considered that there was not a shop in the
country then capable of turning out anything but
the simplest machinery. Despite all adverse condi-
tions, industries multiplied and prospered. Ameri-
can wool, which had hitherto been supposed only
fit for the coarsest kinds of cloth, was successfully
used for the manufacture of finer fabrics. The first
woolen-mills, owing their origin to the pressure at
this epoch, were started in 1809, and during the war
turned out satinet which sold at $4 per yard, and
broadcloth which brought from $10 to $i 2 per yard.
In this, as in the majority of other lines, prices were
abnormally high, and the manufacturers made much
money. Cotton-mills were also started. Many em-
barked in the new ventures, and nearly every kind
of manufacturing was represented. When the war
ended prosperity departed as suddenly as it had
come. England, in her desire to regain her former
market, poured in her goods at prices far below
those at which the New York manufacturer could
afford to sell his products, and forced him to shut
his doors. Tens of thousands of dollars of lost capi-
tal, and hundreds of operatives out of work, made
up the result of New York's first effort to enter the
ranks of the world's producers. It was not alto-
gether a dead loss, though, for a spirit had been
roused which continually manifested itself during
the next twenty years, and which eventually placed
this city high in the list of manufacturing centers.
With the return of peace, Messrs. Adams, Galla-
58
ONE HUNDRED YEARS OF AMERICAN COMMERCE
tin, and Clay went to England, where on July 3,
1815, a commercial convention was negotiated,
copied substantially from Jay's treaty, but with an
added proviso for absolute reciprocity in direct trade
by the abolition on both sides of all discrimination.
This convention was ratified December 2 ad. Con-
fidence was seriously checked by the financial and
industrial depression which followed the war, but
New York was among the earliest cities to rally and
continue her enterprises. By far the most impor-
tant of these was the proposed Erie Canal. It con-
templated the connection of the Hudson River and
the Great Lakes, thereby bringing to New York the
wealth of products of the great inland basin thus
reached. Ground was broken in the work of dig-
ging the great canal by James Richardson, on July
3, 1817, near Rome, N. Y. Eight years were re-
quired for the completion of the task. On Novem-
ber 4, 1825, the first fleet of canal-boats came through
from Buffalo to New York City, Governor De Witt
Clinton, who in the face of almost insurmountable
obstacles had carried the work through, being in the
first boat. The event was celebrated in New York
with the greatest enthusiasm, and marked the com-
mencement of the system of communication since
established both by rail and water with the interior
of the country.
As Governor Clinton and the few far-sighted men
who had supported him in his giant undertaking
had foreseen, the new canal began at once to revo-
lutionize the internal trade of America. By it New
York was able to reach, cheaply and quickly, dis-
tricts which had hitherto been accessible only by a
long and circuitous route around Florida, through
the Gulf, and up the Mississippi River. The Erie
Canal afforded to New York what she then most
needed — an opportunity to extend her domestic dis-
tribution and collection. It was the first move made
for the protection of this city against the prosperous
factors of New Orleans, to whose doors the great
Mississippi was bearing in daily increasing numbers
the huge flat-bottomed river-boats laden with the
products of the West. Many States, like Ohio, In-
diana, and Illinois, were in the habit of sending their
products to New Orleans for export, although ob-
taining their supplies and imports from New York.
The canal put all these localities in closer touch
with the great seaboard city, and paved the way as
nothing else could have done for railroad transpor-
tation facilities, when their turn came, a few years
later.
Meantime the commerce of New York continued
to flourish. Packet lines with regular weekly sail-
ings were established, the first being the Blackball
Line, founded in 1816 by Isaac Wright & Son, Fran-
cis Thompson, Benjamin Marshall, and Jeremiah
Thompson. It was followed by the Red Star Line,
organized by Trimble & Company, in 1821 ; the
Havre packets of Depau, in 1822; Grinnell, Min-
turn & Company's London Line, in 1823 ; and the
China and California packets of Low, Griswold &
Aspinwall, still later. The first of these lines, with
its regular sailing-days, began the systematizing of
transatlantic trade ; and the imports to New York
during the ten years following 1820 increased nearly
$8,000,000, while the export trade made a corre-
sponding gain, the total imports and exports of the
country in 1830 amounting to $144,776,428. Two
years later the $10,000,000 which New York had
put into the great ditch of the Erie Canal was show-
ing its fullest results. With a registered and enrolled
tonnage of 286,438, — greater than Liverpool or
any city in the world except London, — the harbor of
New York was daily thronged with vessels. Either
discharging at the docks — which had by this time
stretched themselves around to the North River
front — or at anchor in the stream, over 500 vessels
could be counted any day in the year. From for-
eign ports nearly 2000 vessels arrived annually, while
twice and a half that number, engaged in the coast-
wise trade, ran in and out in the same time. From
the invoices of all these craft could be read the story
of a volume of trade of dimensions hitherto unprec-
edented. The amount New York paid as valuation
of her imports in 1832 was $53,214,402, while the
total for the rest of the country reached only $47,-
815,864. By these figures it will be seen that New
York's percentage in duties would easily make her
the chief contributor to the revenues of the govern-
ment, as she was and always has been. Of the im-
ports of that time, manufactured articles, fully fifty
per cent, of which were dry-goods, made the great
bulk. Besides the silks, woolens, cotton goods, and
linen, hardware, cutlery, earthenware, and workings
of brass and copper, together with the wines and
spirits which England and France supplied, there
was a large and flourishing trade with Brazil and
the West Indies in sugar, molasses, and coffee, and
with the Orient in tea, spices, indigo, dyestuffs, and
other tropical products.
The exports from New York during this same
year reached the amount of $26,000,945, or between
one fourth and one third of the total exports of the
country. The prominence of New Orleans as a
port of the West explains the discrepancy between
in and out volume of trade of New York, which dis-
ONE HUNDRED YEARS OF AMERICAN COMMERCE
crepancy, in fact, existed more or less markedly up
to the time of the railroads. The exports most im-
portant at that time were wheat, flour, corn, rice,
beef, pork, butter, dried fish, general provisions, furs,
tobacco, and lumber, together with some of the
coarser grades of manufactured goods. In this list
the manufacturing progress of the city since the dis-
astrous setback that followed the War of 1812 is
plainly shown. Soap, boots and shoes, furniture,
carriages, trunks and leatherwork, hats, cordage,
earthen and stone ware, drugs, and rough ironwork
were all being turned out, and in quantity sufficient
to warrant exportation in many of the lines enumer-
ated. There were also paper-mills, type-foundries,
printing-press manufacturers, and large flouring and
tanning interests centered here.
The prosperity of this time, commercial and finan-
cial, was rudely broken in upon three years later by
the great fire which occurred on the night of Decem-
ber 16, 1835, m Merchant Street, and which, after
raging three days, was finally extinguished only by
blowing up a number of houses with gunpowder,
thus leaving a vacant space that the flames could
not pass. It had destroyed, however, nearly the
whole of the business section. In and around Han-
over Square, Pearl and Wall streets, 648 houses and
stores were burned, together with contents valued
at $18,000,000. The blow was a terrible one, and
the insurance companies of the city succumbed at
once. Scarcely one survived. Business of every sort
had been affected, and in the severe winter weather
that prevailed, building had to be delayed and many
interests found themselves homeless. To the de-
pression of this great conflagration can be traced
many of the active causes of the financial panic
which broke over the city and country in 1837, and
for a time darkened the whole commercial horizon.
As in the past, however, New York was one of the
first to feel better times. The country was growing
fast and demanded hundreds of articles for which
New York was the distributing point. Ohio, Indi-
ana, and Illinois had undertaken canals connecting
the Ohio and Mississippi rivers with the Great Lakes
at Cleveland, Toledo, and Chicago ; but with all these
increased activities elsewhere New York had main-
tained its position as the great port of entry. Bal-
timore's attempt to accomplish a connection with
the West by the Baltimore and Ohio Railroad in
1828 did not prove immediately valuable when com-
pleted, and Philadelphia, with the otheri seaboard
cities, still found the lofty walls of the Alleghanies
an insurmountable obstacle. Railroads were in op-
eration, but only in unconnected lengths, and trunk-
lines were still in the future. The telegraph, des-
tined in its later applications to revolutionize the
commercial methods of the world, was discovered
by Professor Morse in New York, and a line— the
first— was built between this city and Philadelphia
in 1845. A setback caused by another great fire
in this same year (1845), which destroyed nearly
$8,000,000 of property, was speedily passed over.
The railroads were surely, if slowly, increasing and
improving. The trade in the China seas and with
India was extending, and despite its great risks
many houses were growing rich and powerful in its
pursuit. Manufacturing had increased to a point
where the permanency of its institution could no
longer be doubted. The boundless resources of the
great Western granaries were pouring in yellow
streams to Europe. The Collins Line of steamers,
with five magnificent ships subsidized by the United
States government, were put upon the Atlantic
Ocean ; but the loss of the Pacific and Arctic, fol-
lowed by the withdrawal of the subsidy, ended the
operations of the line in 1858.
The event of this period, so far as New York's
commercial greatness is concerned, however, was
the opening of the first trunk-line, the Erie, to Dun-
kirk, in 1851. It demonstrated the usefulness of the
railroad, doubted even at that day by many, and
was speedily followed by other great systems stretch-
ing out in all directions. Long before this first road
was finished New York's position as the metropolis
of the United States was assured ; but its connection
with railroads of sufficient length was as important
to it as the opening of the Erie Canal had been
twenty-five years before. The commercial interests,
which had originated, developed, and supported the
city's greatness, began still further to expand. The
financial troubles of 1857 found New York the least
susceptible to their attack. It speedily recovered,
and the next year saw the commerce of the country
reach a total valuation of over $500,000,000, of
which only about two fifths was accredited to New
York, despite the fact that nearly two thirds of the
imports, amounting to $180,953,843, had passed
through her custom-house. The preeminence of
New Orleans in the cotton export trade still con-
tinued to keep that city on terms of formidable riv-
alry with New York, while Galveston, also deriving
its importance from the same staple, was coming to
the front with Baltimore, Savannah, and Charleston.
This year of 1858 was destined to see one of the
most marvelous of the century's achievements— the
laying of the first transatlantic cable, which was ac-
complished through the enterprise of several of New
60
ONE HUNDRED YEARS OF AMERICAN COMMERCE
York's public-spirited citizens. Though it operated
successfully for only a few days, its practicability
was demonstrated, and 1865 and 1866 saw others
laid and the present great oceanic system of tele-
graphs begun.
The brief operation of the cable of 1858 furnished
one striking incident of the utmost commercial im-
portance. Over it was announced the collision be-
tween the steamers Europa and Arabia, the recep-
tion of this news saving the business world at least
$250,000, which would otherwise have been spent
in additional insurances on the vessels and their
cargoes.
In 1859 the country at large owned a total ton-
nage of 3,485,266, — greater than that of any or all
nations on earth except the United Kingdom,— while
New York herself alone had a tonnage greater than
any of the other countries, with the exception of
Great Britain. This great fleet, carrying the chief
part of all America's commerce under her own flag,
was also strong in her competition for the carrying
trade of the world, the lion's share of which she had
already won. In the coastwise trade an enrolled
and licensed tonnage of 1,377,424 plied to and from
New York harbor.
The period comprised by the next few years is
one which lends itself to be told by figures more
readily than in any other way. The growing net-
work of the railroads had been slowly diverting the
cotton from the smaller seaports in its movement to
the markets, and New York was now getting a fair
share. Her total imports for the year 1861, preced-
ing the Civil War, amounted to $188,790,086, out
of $287,250,542 credited to the country as a whole.
Of the exports, of the value of $204,899,606, New
York had more than doubled the figures of three
years earlier, and claimed $118,267,177. The ton-
nage of the country had swelled to the vast total
of 5,299,175, and merchantmen carrying the Stars
and Stripes and hailing from New York could be
seen in every port of the civilized world. It was
the golden age of American shipping ; and although
New York is a far greater city to-day than she was
then, it is still a matter of regret that she cannot
carry on her vast transactions with an American
marine, rather than beneath the flags of other coun-
tries whose vessels traverse the seas. The golden
age was brief, however. It grew up in the years be-
tween 1820 and 1860, and it was cut down almost
in a year— one year of war. The close of 1862
found the United States' merchant fleet smaller by
many thousands of tons than it had been the pre-
ceding year, while Great Britain, ever on the watch
to secure an advantage, had increased her fleet cor-
respondingly and was rapidly becoming the carrier
of the world's freights.
The imports at New York showed still further the
effects of the war. A falling off of over $50,000,000
was the record, but even this was far better than
that which happened to the remainder of the coun-
try, which added up its total import trade to only
$189,356,677. The export trade of the country at
large was affected least by the troubles of this time
and only decreased slightly, while New York's ex-
ports actually increased, amounting to $127,65 1,778,
or about $9,000,000 more than during the preced-
ing year. The cause of this was shown later in the
year following the war, when between the exports of
New York for 1864 and those for 1866 there was a
falling off in the latter year of nearly $33,000,000,
due mainly to the resumption of the Southern ports.
The effect of the Civil War upon New York's
commerce fortunately lasted only a short time.
Had it not been for the disturbance it caused to
general business it is doubtful whether the war, in
its effect commercially, would not have been con-
sidered to a high degree beneficial. The figures,
when studied, show this to have been so relatively,
at least. New York was undoubtedly more promi-
nent and a larger factor in the trade of the country
between 1861 and 1864 than she is now, but it was
a much smaller trade. Her own particular pros-
perity increased with the end of the war, and in
1870 her imports and exports had increased to over
$100,000,000 greater than they were in 1862, while
the total trade of the United States aggregated nearly
$900,000,000.
The foregoing figures show that the commerce of
New York recovered very quickly from the shock of
war. The shipping interests of the city were not so
fortunate. Out of a total lost tonnage of 1,104,435
due to the war, New York had suffered about one
fifth of the whole. This loss has been recovered
but slowly, and even to-day the figures have not re-
turned to the point from which they fell. Instead
of two thirds of the commerce of the port being
done in American bottoms, as it was prior to 1860,
there is scarcely a quarter of it that does not go to
foreign carriers. England has nearly 8,000,000 of
tonnage more to-day than we, and much of New
York's trade is carried on under her flag. Ship-build-
ing has accordingly ceased to be a great New York
industry, which it was earlier in the century.
Since the war all attempt to particularize in sketch-
ing the history of such a gigantic emporium as New
York is hopeless. The causes which have already
ONE HUNDRED YEARS OF AMERICAN COMMERCE
been laid down as operating to bring about her
greatness are equally strong to maintain it. The
natural center of the enormous wealth of the East-
em seaboard States, she is also in direct contact by
her railroads and waterways with the most remote
centers of production, and to her as the only real
distributer must the imports come. Despite the
fact that storage and wharfage charges are higher
than in almost any other port, one third of the entire
wheat crop of the country is exported from this city.
The war and the railway systems together have so
militated against the Southern cotton ports that a
large share of that trade passes through New York.
Petroleum and the valuable products of the won-
derful oil regions, dressed beef and pork from the
enormous packing-houses of Chicago and other
Western cities, live cattle from Texas and the
Western plains, and breadstuffs and provisions of
all kinds, make up much of the great volume of
exports. Of the staples of import, among the most
important are sugar, coffee, tea, and tobacco. Of
these, one half the sugar and three fourths each of
the coffee and tea imported for the whole country
pay duty at this port.
To show more clearly the magnitude of the busi-
ness transactions involved in the commercial state-
ments of to-day, a few figures taken from the best
available sources will be useful. The year 1885
gave a total volume of commerce for the United
States of $1,304,210,275. New York's returns for
the same period showed imports amounting to $380,-
077,748 and exports $334,718,227, making a total
of $714,795,975- In 1893, in the face of the finan-
cial and commercial troubles of the year, the coun-
try's total foreign trade showed an increase of nearly
$350,000,000, making a total of $1,652,354,534.
New York's share in the nation's increased trade
was about $170,000,000, her total figures for the
year being $886,487,641.
To meet the demands of the enormous traffic in-
dicated by these figures, New York has expanded
in every way. It now has a population of about
2,000,000, and manufacturing interests with an an-
nual productivity of $600,000,000 and employing
500,000 hands. It is a center for the greatest
railways of the country, and a sailing port for half
a hundred great ocean steamship lines. It has a
water-front of twenty-five miles, thirteen of them
being along the North River, and the dock facilities
are increasing every day. The recently completed
Harlem Canal between the Harlem and Hudson
rivers has been put into operation, and with its facil-
ities the great coastwise trade in bricks, ice, and
lumber between New England and the Sound ports
and the Hudson River towns has been materially
increased, and a saving of many miles accomplished
for a number of vessels coming in on one side of
Manhattan Island and having to discharge on the
other side.
The harbor of New York to-day is thronged with
vessels the year round. Lofty-masted sailing fleets
are docked along South Street ; coastwise vessels
and freight and passenger transatlantic steamships
stretch for miles along West Street, interspersed with
slips for market-boats and fishing craft ; while count-
less ferries furnish a connection with neighboring
cities. 5,000,000 annual tonnage is computed to be
the extent of the city's shipping traffic, and 928,000
of this is in the foreign trade, the coastwise trade
with its colliers, and the fleet of New England schoon-
ers, making a large percentage of the remainder.
A total of about 6000 vessels, steam and sail,
arrive here annually from foreign ports, while nearly
16,000 enter in the coastwise trade, of which fully
14,000 are sailing craft. In addition to the Euro-
pean lines there are regular steamships to Brazil,
Venezuela, the Central American and Mexican ports,
and the West Indian Islands.
The precautions taken to guard the city from
contagion from any of the increasing number of
merchantmen have resulted in the establishment of
an effective quarantine. Originally instituted in
1746 on Staten Island, moved to Bedloe's Island
in 1784 by the State legislature, and to Governor's
Island in 1794, it returned finally to Staten Island
in 1 80 1, where its usefulness has steadily increased.
The immigration in this country centers almost en-
tirely in New York, over four fifths of the total tide
coming to Ellis Island.
The mercantile interests of the city have likewise
increased with the general expansion, until to-day
there is scarcely a great interest in the country which
has not agents in New York. Foreign houses also
have established branches here, and the old mer-
chant of one hundred years ago has become the
great importer of to-day, while his jealously guarded
designation of "merchant" has fallen upon the
modem business man, jobber, wholesale dealer, and
manufacturing agent.
Diversified as the commercial lines have become,
the growth to separate importance of the various
branches with their ramifications has compelled the
introduction of new methods. The Chamber of
Commerce and the Board of Trade and Transpor-
tation constitute bodies as great and productive of
good as ever, but around them have grown up many
ONE HUNDRED YEARS OF AMERICAN COMMERCE
subdivisions of the various interests. A single trade
to-day transacts a greater business than the com-
bined interests of the whole city did one hundred years
ago, and some facilitation of this enormous business
became necessary. This has resulted in the estab-
lishment of many exchanges, such as the Produce,
Cotton, Coffee, Coal, Metal, Consolidated, Fruit,
Real Estate, and others, all of which concentrate
the interests they represent at some commercial
point. The shipping interests are represented at the
Maritime Exchange, and the facilities of the cus-
tom-house, public stores, and bonded warehouses are
such as have been found to be of the greatest prac-
tical benefit. There are 1700 employees in the cus-
toms service in New York; and $150,000,000, col-
lected at the modest cost of about two per cent., is
the annual revenue this port contributes to the Fed-
eral government.
Summing up the whole situation, New York to-
day as a commercial metropolis outranks any city
in the world, with the single exception of London ;
and it requires no especially boastful spirit to say
that her prosperity is founded upon a securer basis
than that of even the great English capital. Stand-
ing at the national gateway to the great West, the
wealth that pours each way must pass through her
portals. Combining the enterprise that attempts
with the wealth that makes of the attempt a sus-
tained effort, she has only begun her career of great-
ness. She has won success in the first and hardest
stage of her journey, and the way is now clear be-
fore her. Her future is secure, for as surely as the
nation shall wax greater, richer, and more powerful,
so surely shall the metropolis of New York continue
her onward progress.
CHAPTER XI
OUR FOREIGN TRADE FROM A TRADER'S STANDPOINT
DIFFERENT conditions of soil, climate, and
population exist throughout the world, so that
a large portion of the wants of one section is
supplied from the products of another. This inter-
change is the most important agency for bringing
the peoples of the world into harmonious relations.
By its means the interests of different regions have
become so interwoven that to-day no nation can go
to war without seriously prejudicing the interests of
neutral countries as well as those of many of its own
citizens. With improved methods of production, and
the increased facilities for interchange of commodi-
ties, the wants of mankind have rapidly grown. The
luxuries of one generation have become the necessi-
ties of the next, so that to-day the masses are living
under more favored conditions than the nobility of
medieval times, and international trade has increased
fortyfold since the beginning of the eighteenth
century.
The most important developments of this " indus-
trial age " are the railroad, the steamship, and the
telegraph. They have made possible the transporta-
tion of merchandise of great bulk under conditions
generally beneficial to both producers and con-
sumers. Foreign trade has become to-day of so
much importance that the leading men of all nations
are alive to the necessity of mastering the complex
conditions governing international commerce, and
he takes the highest place in this age of industrial
wars who is most prominent in creating conditions
favorable to the industrial development of the people
he represents.
In looking at these rapidly changing conditions
from a trader's standpoint, one fact stands out, that
while the volume of foreign trade has increased,
the margin of profit has proportionately decreased.
The barter of tinsel trinkets, firearms, and spirits for
ivory, pearls, and gold-dust showed such an enor-
mous percentage of profit as to illustrate the igno-
rance which existed under primitive means of com-
munication. As facilities for communication and
transportation improved, rates of freight declined,
widening the circle of trade. During the first three
quarters of this century the margins of profit in
foreign commerce were so large that merchants with
only moderate capital entered the field successfully,
and there grew up in the maritime cities and towns
of this country a well-distributed business in foreign
trade and in the building and freighting of sailing
vessels until we possessed the finest fleet of clipper-
ships in the world.
During the past twenty-five years, however, the
margins of profit in foreign trade and transportation
have been reduced at least seventy-five per cent.
New methods have been adopted in order to suc-
cessfully meet these new conditions. Most of the
houses that were leaders in our foreign trade one
quarter of a century ago did not adapt themselves
to the changed environment of commerce, and were
forced out of business. To-day quick communica-
tion and improved banking facilities enable the
foreign merchant to transact safely a much larger
business in proportion to his capital than was pos-
sible half a century ago ; but these very facilities
have created a competition so intense that to-day
there is little or no profit in transferring the great
staples from producer to consumer, so that the trader
is forced into the position of a speculator unless he
has special facilities for distribution. While in for-
eign trade the middleman is more useful than in
domestic commerce, the tendency of the times is, by
bringing together producer and consumer, to elimi-
nate him. The trader is forced to enlarge the field
of his transactions. This he cannot safely do except
by the use of expert abilities and scientific organiza-
tion. All this makes necessary large aggregations
of capital ; and the tendency to consolidation, which
is the striking feature of industrial enterprise, is find-
ing its way into international commerce.
Yet the trader has a great advantage over the
ONE HUNDRED YEARS OF AMERICAN COMMERCE
farmer and the manufacturer, for his capital is mobile,
and not locked up in land or in machinery that in most
factories must be thrown away within a decade by
reason of new inventions. The Bessemer-steel rail and
the triple-expansion engine have practically placed
the wheat-fields of India, the Argentine Republic,
and the western United States alongside the farms of
western Europe. The cheap land and cheap labor of
India, the natural advantages of the Argentine, and
the great machine-reaped prairies of the West have
destroyed the profit of the European tiller of the
soil, and practically extinguished the margin for the
landed proprietor. The great discontent in Europe
to-day is largely due to the unfavorable condition
of the agrarian classes; and the demand made by
them for something to better their condition has
forced to the surface the agitation of false theories
for improving trade through silver legislation.
The statistician Mulhall has made it possible to
know what the trade of the world has been, and to
trace year by year its enormous growth. The fol-
lowing table shows approximately the aggregate
value of imports and exports of each country in
millions sterling :
great force of the nation has been directed toward
the development of our internal resources ; to inter-
state commerce rather than to the extension of for-
eign trade. The largest commerce of the world,
conducted under the conditions of absolute free
trade, is carried on between the States of the United
States. Untrammeled by customs-duties, the people
of the United States, covering a territory of 3,000,-
ooo square miles, have created the most efficient
systems for exchange of commodities. They have
built 185,000 miles of railways — as many miles as
exist in all the rest of the world. They have created
the most complete systems of navigation by lake,
river, and canal, and a banking system by which a uni-
form and stable currency exists throughout the entire
country. They have not only opened up mines and
extended agriculture, but they have developed man-
ufacturing; and while the rate of wages has been
higher in this than in any other country, the people
of the United States, forced by necessity to meet the
low-priced labor of other countries, have applied
their high intelligence to the invention of labor-
saving machines, so that to-day, although the popu-
lation of the United States is but 70,000,000, the
FOREIGN TRADE OF DIFFERENT COUNTRIES IN MILLIONS STERLING.
COUNTRIES.
1720.
1750.
1780.
1800.
1820.
1830.
1840.
1850.
1860.
1870.
1880.
1889.
Great Britain
17
21
22
67
7<1
88
1 60
77C
CA"?
698
France
7
13
66
107
Germany
8
ie
2O
76
AQ
4.6
C2
167
Russia
8
17
28
A.S
lie
Austria
2
6
8
Si
Italy . .
•?
c
7
3°
66
Spain
IO
18
Portugal
2
|
18
Scandinavia
2
7
t
5
8
§
48
J4
flA
Holland and Belgium. . .
Switzerland
4
I
6
2
8
15
24
1
3°
45
61
86
136
237
DO
310
60
Turkey, etc. . .
2
6
3"
45
29
55
49
72
Europe . .
62
228
Af\R
CTfi
United States
7
17
301
400
57°
62
T3fi
!>573
KI-
2>I34
2>3J3
Spanish America
IO
TC
A%
M°
1D5
ifir\
320
ififi
British colonies . .
2
35
7°
94
'35
India
9
44
103
OK
T!-»8
Various
c
3°
So
85
131
Z5
3°
35
5°
i°5
149
The world
88
1 86
Q,-
34 1
407
573
532
,4»9
2,191
3'°33
3>377
From this general view of international trade let us
turn to the foreign trade of the United States. I am
informed that Mr. Worthington C. Ford in his con-
tribution to this history of American Commerce,
will give in detail the statistics of our imports and
exports. Although the foreign trade of the United
States has increased so that we now do as much in
one week as we did in one year a century ago, the
labor-saving machinery which is run daily in this
country — its fixed steam power being one third of
that of the entire world — has a far greater produc-
tive capacity than the population of the Chinese
empire.
The restless enterprise of America, having con-
quered more than half the continent, it is now turn-
ing toward other fields of activity. In the effort to
CHARLES R. FLINT.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
extend our commerce it is natural first to consider
the countries south of us. These countries can buy
of us manufactures and food products. Their prin-
cipal employment is agriculture, and they form one
of the most important groups of those nations which
are known to economists as " neutral markets."
There are many evidences of the strength of the
movement toward enlarging our commercial rela-
tions with these sister republics : the assembling of
the International American Conference, at which
all the republics of the Americas were represented,
called under an act of our Congress for the pur-
pose of extending inter-American trade ; the com-
pletion by an American company of telegraphic
communication by land and sea to the southern-
most cities of South America ; the appointment of a
commission, with representatives from North, South,
and Central America, to report the most desirable
route for an intercontinental railway ; the establish-
ment of the Bureau of American Republics, for the
purpose of publishing their statistics and other in-
formation of interest to those engaged in American
trade ; the simplification and unification of customs
regulations ; a Monetary Conference to study plans
for facilitating inter-American exchange ; the unani-
mous recommendation by all of the American re-
publics to establish an International American Bank
under an act of the Congress of the United States,
with branches in all the other American republics ;
the celebration of treaties of reciprocity ; the pro-
posed establishment of a permanent court to settle
all inter- American disputes by arbitration ; the open-
ing to our southern neighbors of this great consum-
ing market by continuing the free admission into
the United States of hides, rubber, nitrate of soda,
and other products, and the recent removal of the
duties on coffee, sugar, and wool, so that to-day over
ninety-five per cent, of the products imported from
Mexico, the West Indies, South and Central America,
amounting to $235,000,000, are admitted by us free
of duty. Important as these have been, of still more
efficiency is the incessant activity of American mer-
chants and manufacturers who are engaged in press-
ing their wares upon the attention of these most
excellent customers.
The merchant engaged in foreign trade is obliged
to study not only the conditions of the markets which
are the distributing points of products, but he must
also investigate the conditions of production. The
American system of manufacturing great quanti-
ties of articles all precisely alike is favorable to uni-
form quality at the lowest cost. This cost is still
further decreased when manufacture is highly con-
centrated. As a result many great industries are
availing themselves of the advantages of centraliza-
tion, and so securing economies. The first important
aggregation in capital and intelligence for the pur-
pose of securing cheap production was the Standard
Oil Company, and they show what may be accom-
plished by economical methods in building up a great
foreign trade. Without assistance from tariff pro-
tection that great combination has reduced the cost
of illuminating oil to a point where it has been able
to furnish a brilliant but low-priced light even to the
countries where the people are the poorest and de-
mand the lowest price, such as China, Japan, and
India. The aggregate of these exports has reached
the enormous sum of $45,000,000 per annum. The
underlying principles which have created this great
success are now being applied to many other in-
dustries. Through these consolidations the capacity
for cheap production is greatly increased, and such
concentration of capital and industry will be a great
lever in enabling the United States to take possession
of foreign markets that heretofore have been domin-
ated by competing nations.
In labor-saving machinery and in intelligence of
the labor employed, the United States to-day is
in advance of the rest of the world. As an evi-
dence of the progress we are making as a manu-
facturing nation our exports of manufactures this
year will amount to about $200,000,000 as against
$40,000,000 in 1 860. While our merchant marine
has relatively declined, the fleets of other nations
are at our service. But in one respect we are
far behind the manufacturing nations of Europe.
Our banking system was organized originally with
a view to enable the government to borrow great
sums of money from the people during the Civil
War by selling bonds to be used as a basis for
circulation. It has since been modified, and is
to-day a most excellent instrument of interstate
commerce ; but it is utterly inadequate to deal with
foreign trade. The banking facilities of Great
Britain devoted exclusively to the foreign commerce
of that country represent an investment of hundreds
of millions of pounds sterling, while the foreign
merchants of the United States are forced to not
only be their own traders, but their own bankers.
Yet the advantages of foreign trade are great, and
when the attention of the financiers of the country
shall be directed to the organization of proper institu-
tions devoted to supplying this deficiency, the effect
upon the increase of American exports will be marked.
Such are the conditions of the past and of to-
day from the trader's standpoint ; yet he may look
ONE HUNDRED YEARS OF AMERICAN COMMERCE
toward the future with equanimity. While there is
a tendency to eliminate the middleman, neverthe-
less, if he be one of those fittest that are to survive,
he will greatly increase his capital. He will perfect
his organization so that he is ably represented in
every market where he attempts to do business.
He will freely use the cable to put himself in pos-
session of all the price-making facts. He will
assist in the formation of banking organizations
which will enable him to finance his operations.
While the average profit of transactions is steadily
decreasing, he may so increase their volume and
decrease the expenses of doing business that the net
profits shall be as large as or larger than before.
Then the rapid advance of America into the field of
international trade will almost push him forward
into prosperity, for the skill and knowledge acquired
through long years of business relations with foreign
markets must be availed of by the manufacturers
and producers who wish to sell their goods abroad.
By reason of superior organization he is able to per-
fectly protect himself with reference to the standing
and credit of his customers, and through his large
capital he is enabled to spread his transactions over
so many countries as to greatly divide his risks. By
associating himself with the many movements to-
ward concentration of capital and consolidation of
production he will be able more readily to defeat
his European rivals in the markets of the world.
He will do all that he can to forward such enter-
prises as the Nicaragua Canal and the Interconti-
nental Railroad, which, while in a sense yet dreams,
are dreams in course of realization. By means of
these agencies certain disadvantages of the United
States in the struggle for the world's trade will be
more than counterbalanced, and the trader will be
brought far nearer than before to the many regions
with which he desires to do business.
During the past ten years the foreign trader has
been most seriously prejudiced by the violent fluc-
tuations and uncertainty arising out of the unwise
attempts to create an artificial value for silver.
Through legislation the price of silver was advanced
to $1.20 per ounce, but speedily reacted to less than
sixty cents. While these conditions, because under-
mining confidence, caused the panic of 1893, the
trading in this country, owing to the government
sustaining the stability of its currency, had the ad-
vantage of being conducted upon a fixed basis ; but
the trade of our sister republics and of the other
countries on a silver basis was directly subject to the
rapid fluctuations in the white metal. Importers were
obligated to remit in gold, and then, owing to the de-
preciation of the currency, had to take fifty cents on
the dollar. These conditions doubled the prices of
imports, thus curtailing the volume of importations.
No conditions have ever arisen which have so
obstructed foreign trade. False hopes of relief were
based upon efforts to formulate an international
agreement fixing a uniform ratio between gold and
silver. Fortunately the silver question, after several
campaigns of education, is better understood, and
this vexed problem is in course of solution by natural
laws. Low prices are reducing the production of
silver, while the output of gold is rapidly increasing.
No business has been so seriously affected by the
uncertainty and extreme fluctuations in the price of
silver as international trade, and probably none will
benefit so much by stable monetary conditions. Our
foreign trade is already beginning to feel the effect
of greater financial stability. The power of return-
ing confidence, with the accumulated energy of years
of inactivity, multiplied by the modern facilities for
production and transportation, will create an era of
prosperity in international trade unknown in the
history of the world.
CHAPTER XII
WALL STREET
THE name "Wall Street" is but a symbol
used to signify the American money market.
As the dollar-mark placed before long rows
of figures throws a golden luster on the column, so
the name of the little great thoroughfare that runs
from the high gate of old Trinity down to the East
River lends its own significance to the surrounding
locality. Nassau, Pine, Cedar, Broad, New, Wil-
liam, and Hanover streets are all as truly parts of
the expanded Wall Street of to-day as their bankers,
brokers, and business are a part of the great Ameri-
can money market. Around the Wall Street of a
century ago as a nucleus have gathered the great
moneyed interests of the New World, and it is they,
rather than any particular street, that are designated
to-day by the term " Wall Street." Yet, if the his-
toric old street has broadened somewhat in signifi-
cance and application during the past century, it has
still lost none of its identity. Since the memorable
day in 1789 when George Washington, standing on
the steps of the old Federal House, took the oath
as first President of these United States, the street
he then surveyed has been a center for every great
national enterprise. It has been the one fixed point
around which have revolved the great financial
panics that swept the land, and it has also been the
source whence have sprung many of the greatest of
those undertakings which have rendered our country
and the age alike famous.
Something over two centuries ago green rolling
fields stretched from Broadway to the East River.
Along the ridge of the hill at the head of Broad
Street stood the high palisade of stout timber de-
fending the town against any sudden incursion of
the red warriors who still prowled the neighboring
land. This palisade, which gave its name to Wall
Street, has long been gone. It outlived the red
men, and was finally torn down, the line it made
being laid out and named Wall Street. To-day it
67
and its significance are forgotten, as are those fair-
haired, red-cheeked Dutch maidens, who, tripping
down the foot-path to the water, bearing the house-
hold linen to the wash, gave their name to Maiden
Lane ; or the jolly old burghers, clad in baggy knee-
breeches and smoking long pipes, who, in the days
of doughty Peter Stuyvesant, played their game of
bowls upon the smooth turf of Bowling Green. It
is only in the few names like these still left that we
find how historic are many old city ways. Among
them all Wall Street stands with the earliest. There,
when the old Town House was demolished in 1699,
was built, upon the site of the present Sub-Treasury,
a new City Hall, the building which was fitted up
six years after the close of the Revolution for the
meeting-place of Congress, and at which President
Washington was inaugurated.
The importance of Wall Street, therefore, may be
dated from 1700, when the affairs of the municipal-
ity centered there. By the middle of the century it
was a " grand street " with handsome private resi-
dences, the seat of the colonial legislature, and the
central point for all the political and social life of
the day. The State legislature, too, met in Wall
Street until the capital was removed from New York
to Albany, and for fully fifty years the official life of
New York converged there. Nevertheless the tide
of affairs was slowly rising in the old thoroughfare,
and the private residences began to give way before
the offices of the great merchants, who were forsak-
ing lower Broadway and the smaller streets down-
town. The shopkeepers and small traders, however,
did not venture upon this ground. It was only the
great merchant princes and moneyed traders who
first planted the standards of business in Wall
Street. To them naturally came others, and the
Bank of New York, of which General Alexander
McDougal was the first president, was in existence
but a few years when it was removed to Wall Street,
68
ONE HUNDRED YEARS OF AMERICAN COMMERCE
where it established itself in 1791 at the corner of
William Street, being the first bank in New York City
and the first on Wall Street.
Had the wishes of the Bank of New York been
respected there might never have been another one
in the Street; for its influence was strong in the
legislature, and for years it was impossible for any
other banking charter to be obtained. The estab-
lishment of the second bank in Wall Street, and the
State as well, came about in a most curious manner,
and the credit of its accomplishment belongs to that
shrewd lawyer, Aaron Burr. He introduced in 1799
into the legislature a bill to charter the Manhattan
Company, a corporation of large capital which pro-
posed constructing a system of water-works. Yellow
fever, then an annual scourge, caused the people to
welcome gladly any improved sanitary regulation,
and pure water was considered of the utmost im-
portance. Viewing the matter thus, even the watch-
ful politicians who were assembled in the legislative
halls saw little to object to in the new company, and
it was chartered accordingly. One brief clause had
been overlooked, however, and in it lay the pith of
the cunning Burr's success. This clause, after recit-
ing that the company's capital should be expended
in the construction of a system of water-supply,
provided that if any surplus should remain it could
be used in any business " not unlawful." Under this
head banking most certainly fell, and the Manhattan
Company, finding speedily that they had a surplus,
used it in founding their bank that same year, the lo-
cation chosen being at what was then 23 Wall Street.
One thing, however, must be said, which is that
the Manhattan Company was equally prompt in
providing its water-supply. The water was ob-
tained from an old spring, and the reservoir was
located near the corner of Reade and Center streets,
where it remains to this day, an odd-looking, old-
fashioned cistern enough, but still capable of pro-
viding water as it did nearly a century ago, when it
was considered almost as great an engineering feat
as the present Croton Aqueduct. It is years since
water has been used from it. The pipes by which
the Manhattan Company carried water through the
town were made from solid logs, the centers care-
fully bored out and the lengths jointed together.
Occasionally, even now, some contractor digging in
the lower streets of the city brings to light one of
these old pipe logs, laid so long ago ; and several
sections thus exhumed have been bronzed, and are
carefully kept in the Manhattan Bank as mementos
of the great work in the earlier days.
The choice by these two banks— the only ones in
the city — of Wall Street for their location must be
regarded as the final election of that street as the
home of American finance. The United States
Branch Bank was opened there in 1792 ; the Mer-
chants' was there in 1805, and the Mechanics' Bank
in 1810. Meanwhile, too, another potent factor
in centering business interests in Wall Street was
introduced by the erection in 1794 of the Tontine
Coffee-House. Here at noon every day gathered
the merchants from their counting-rooms and ware-
houses to discuss the news of the day, compare
notes, chat, and even make trades. At the plain
old bar in the center of the great room the best
liquors, at a time when good liquor was the rule,
were to be had ; and sedate old merchants, with a
piece of the thirst-provoking salt codfish or a dry
cracker in one hand, and a steaming glass of old
Jamaica, oily schnapps, or sound old port in the
other, gravely exchanged the courtesies of the day.
" High 'Change " they called this hour, and, entirely
apart from its convivial features, the benefits of this
general intermingling of the business men of the city
were found to be so important that a merchants'
exchange, having the Tontine Coffee-House as its
headquarters, was formed. Thus did the Exchange
first manifest itself in Wall Street, and quotations
now disseminated broadcast by electricity were then
obtained by word of mouth, the Tontine Coffee-
House being large enough to contain all the great in-
terests of the New York business world of 1795.
In this latter year, with which the century under
discussion begins, the banking facilities of New
York, exclusive of the branch office of the Bank of
the United States, aggregated considerably less than
$1,000,000, and business was synonymous with for-
eign trade. The merchants were the men of affairs,
and, except in foreign commerce or domestic traffic,
there were few ways to invest idle funds. The
buying of land — real-estate investment — had not
then become general, and manufactures were almost
unknown, at least as a field for the investment of
large capital. Gradually the very extension of
trade and business requirements began to bring
complexities. Capital increased, and the distinctive
function of the banker began, which, according to
Ricardo, is "using the money of others." Banks
increased, insurance companies sprang up, and the
management of money as apart from its use in the
channels of trade gradually became more and more
distinct. Private bankers, always in existence, gave
up little by little the mercantile branches of their
business, brokers who bought and sold for others on
commission could be found as easily in Wall Street
JOHN P. TOWNSEND.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
as at the present time, and by 1810 all the various
elements found on 'Change to-day could be observed
working themselves into distinctness.
One of the earliest of the great merchants and
bankers who ruled on Wall Street in 1796 was
Nathaniel Prime, better known as " Nat " Prime.
Later on he was the head of the famous banking-
house of Prime, Ward & King, a firm as great in
its day as any whose name rules the Street now.
" Nat " Prime was a hard-headed, picturesque old
figure, who had, rumor said, been a coachman in
Boston in his younger years. A keen fellow, he had
saved and loaned at interest until he gathered a
small sum. He was doing a small brokerage busi-
ness in New York, when, it is related, he met at a din-
ner-party one evening a rich Southern planter. The
conversation turned on money-making, and Prime
remarked that if he had $5000 he would double it
in a year. The planter asked him what security he
could give for such a loan. " The word of an hon-
est man," replied Prime ; and on that collateral the
Southerner advanced him the money. So Nathaniel
Prime got his start. Within the year he had paid
his benefactor back ; but he gave no more than was
strictly due ; and when, some years later, the same
Southerner, being in financial straits, applied to him
for a loan on the security he himself had given, he
refused him. Gratitude was a debt the law did
not recognize nor " Nat " Prime pay, but in his
financial dealings he was always the very soul of
integrity.
From these beginnings to being head of the
greatest banking-house in New York and a king in
Wall Street was a career, however, that showed the
business qualities of Nathaniel Prime ; and in the
dawning importance of that famous street his was
one of the most prominent figures. One of the first
significant events showing the extending influence
of Wall Street as a financial center was the famous
conference of its four great powers, Nathaniel
Prime, John Jacob Astor, John Robins, and John
Hone, when the State of Ohio, in 1825, contemplat-
ing internal development on a large scale, applied
for a heavy loan. Two days and a night did this
session last, and then the first great ultimatum of
Wall Street magnates went forth to the Ohio ambas-
sadors. Enact into statute certain stipulated con-
cessions and the money will be forthcoming, was the
tenor of this decision. Back to Ohio went the dele-
gates. The legislature deliberated, and passed the
required bills, and from Wall Street to Ohio went a
vast loan. This first syndicate was one that might
have been a little more peremptory in stating its
terms than those of to-day, but it was equally
prompt in living up to its agreements.
The development of the business of Wall Street
as a financial power brought in its train a system of
operations based upon the exchange of funds, the
representation in stocks of intrinsic values, and the
acknowledgment in bonds of indebtedness and lien.
Around these three simple quantities has grown the
multiplex money market of to-day. There were few
stocks, or bonds either, in 1795; nevertheless the
brokers were already on the Street, and Bleecker's
famous old auction-room was the first place where
the early bulls and bears resorted. It was a small
enough stock-list they had to operate with in those
days, and seemingly simple to master. The two or
three banks and insurance companies then existing
were quoted, and the three or four classes of gov-
ernment secuirties, but these were all. Sudden or
extreme fluctuations, except in time of war, were
almost unknown, and an operator who conned his
list well on Monday was generally posted for the
week. Upon such a field as this did the great New
York Stock Exchange make its first appearance.
Under an old buttonwood-tree standing in front of
60 Wall Street the early brokers of New York met
one day in 1792, and set forth the purposes and
obligations of the association in the following
agreement :
" We, the subscribers, brokers for the purchase and
sale of public stock, do hereby solemnly promise
and pledge ourselves to each other that we will not
buy or sell from this date, for any person whatso-
ever, any kind of public stocks at a less rate than one
quarter of one per cent, commission on the specie
value, and that we will give a preference to each
other in our negotiations. In testimony whereof
we have set our hands, this seventeenth day of
May, at New York, 1792. Lemuel Bleecker, Hugh
Smith, Armstrong & Barnewell, Samuel Marsh,
Bernard Hart, Sutton & Hardy, Benjamin Seixas,
John Henry, John A. Hardenbrook, Samuel Beebee,
Alexander Zuntz, Andrew D. Barclay, Ephraim
Hart, Julian McEvers, G. N. Bleecker, Peter
Anspach, Benjamin Winthrop, John Ferrers, Isaac
M. Gomez, Augustine H. Lawrence, John Bush,
Charles McEvers, Jr., Robinson & Hartshorn,
David Reedy."
This agreement was the only one by which the
members were bound until 1820, when daily meet-
ings and the regular call of stocks began. The
board had its permanent headquarters after 1825 in
the Old Merchants' Exchange; but after that was
destroyed by fire it established itself in one of the
70
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Jauncey buildings, whence it removed in 1842 to
the New Merchants' Exchange, now the Custom-
House. There it remained until 1853. Until that
time the board had been the closest of corporations,
its membership being governed by iron-clad rules.
Financial news agencies were unknown in those
days, and the board kept its proceedings a profound
secret, violation of this secrecy being punished by
expulsion. So intense was the curiosity over the
proceedings of this body that an Open Board, which
had been organized in 1837, took a building adjoin-
ing and dug the bricks out of the wall for the pur-
pose of spying out what was going on.
The board removed from the Merchants' Ex-
change Building in 1853 to a room in the old Corn
Exchange Bank Building at Beaver and William
streets. In 1857, the year of the great panic, the
board changed its headquarters to the Daniel Lord
Building, with entrances on William and Beaver
streets. Here it was that some of the great specu-
lators of the day flourished. Among these were
Daniel Drew, Jacob Little, and Morse, known as
the " lightning calculator," who made and lost a
fortune of millions in a little over a year. The rule
enjoining secrecy still continuing in force, it is a
fact of record that $100 a day was freely offered
for the privilege of listening at the keyhole during
the time of the calls. The board continued to hold
its meetings in the Lord Building until 1865, when
it removed to its present location. During the war
period the Stock Exchange, with a view to assisting
the government, prohibited its members from selling
government bonds "short," and also forbade them all
dealings in gold. The later action led to the forma-
tion of the Gold Exchange, which, although resulting
in a loss of many millions of dollars to its members,
was taken for purely patriotic purposes. A second
Open Board of Brokers was organized in 1863, with
headquarters in a basement in William Street, called
the " Coal-Hole." So rapidly did its business in-
crease that it soon took more spacious accommoda-
tions in Broad Street, adjoining the Stock Exchange.
The competition continued until 1869, when the old
board called a truce. Amicable negotiations led to
a consolidation of the Stock Exchange, the Open
Board, and the United States Government Board,
the result being the strongest public financial associ-
ation in the country, and one of the most important
in the world. William H. Neilson was the first
president.
The business of this exchange has become to-day
much greater than that of the combined exchanges
of the kind existing in the rest of the country. It is
the very heart of Wall Street, and its functions are as
vital to the development and prosperity of the country
as to the money market. It affords a constant and
regular market for the securities of the great corpora-
tions, and indexes their value in quotations of actual
bids and sales. Without such facilities as it affords,
the shares of these corporations, aggregating a total
par value well up in the billions, would move so
slowly that great enterprises would often lag from
sheer lack of capital. Again, transactions would be
vague, only known to the public when the interested
parties were willing, and the door would be opened
to manipulation and fraud almost unlimited were
the safeguard it affords to be removed. The Stock
Exchange, it is true, cannot control the relation of
values to prices, nor can it direct the management
of corporations by their officials ; but it can and
does secure a fair, free, and absolutely open market,
where the dealings are matters of record and public
knowledge. It can and does further insist that all
stocks dealt in on its floor shall have certain quali-
fications warranting their genuineness, and its " list-
ing" committee examines and investigates the
claims of every new security brought before it, be-
fore it is allowed on the list of those in which
members may deal. In admitting a security to its
list the Stock Exchange does not recommend it to
the public ; it simply places it among the honest
possibilities of the market, to stand or fall by its
own merit. In the unlisted securities dealt in by
special privilege of the exchange the action of the
board differs but in degree, and any stock in which
transactions are allowed, however slight its intrinsic
value may be, is stamped as not bogus.
In the exercise of these functions the Stock Ex-
change has come to stand as the great regulator of
the market for securities, and its transactions, fully
reported, serve as the standard by which values are
established. In the internal economy of the Stock
Exchange every method best adapted to conserve
the ends of straightforward and legitimate business
investment has been adopted. Among the more
important changes of the last thirty-five years have
been the following: the rule requiring the registry
of stocks, in 1869 ; the abandonment of the regular
call of stocks, in 1875; the rule authorizing the
buying in, if not delivered when due, of contracts
of active stocks, in 1884; the establishment of the
Department of Unlisted Securities, in 1885; and
finally the establishment in 1892 of its own Clearing-
House, where all active stocks dealt in are daily
cleared. The publicity the Stock Exchange thus
allows to all transactions, the centralization it affords
ONE HUNDRED YEARS OF AMERICAN COMMERCE
71
to the great interests of the country, and the regula-
tions it imposes upon all operations are among the
greatest advantages it confers. Its liberal enterprise,
coupled with the strictest integrity, aided by the
advantages mentioned, has most naturally placed
it in the van of organizations of this character in
the whole world.
Leaving now the consideration of the component
parts of Wall Street, and taking the Street in its true
significance as one of the greatest financial centers
in the world, its history becomes so vast, so inter-
woven with the woof of national affairs and pros-
perity, that it will only be possible to review it in its
more important phases. The War of 1812, which,
treading on the heels of the Embargo, brought the
first set-back to the new Republic, found Wall Street
still so identified with the mercantile interests that
its prostration with them at the close of the struggle
was only natural. The heavy war loans floated by
the government, however, had found their largest
takers in Wall Street, and that at a time when men
needed all their faith and patriotism to believe even
in the eventual solvency of the country. This was
the first time that the men and institutions of Wall
Street came to the nation's assistance. Looking
back and recalling the era of prosperity that followed
the war and the reestablishment of the United States
Bank, — a prosperity that in twenty years paid off the
great war debt and amassed a surplus of nearly
$50,000,000, — we can see that their confidence was
not misplaced. In this same period, too, during
which De Witt Clinton, in the face of the most
violent opposition, achieved the construction of the
great Erie Canal and placed commercial advantage
in the hands of New York, the evolution of Wall
Street was rapid. For twenty years its progress was
unimpeded, and then came the great fire of Decem-
ber, 1835. Millions of intrinsic value went up in
smoke and flame, and millions more followed in lost
time and opportunity before conditions could re-
adjust themselves. Every insurance company in
Wall Street gave up without recourse before the
overwhelming loss, and the banks felt most keenly
the ruin of their best customers, the merchants.
Just at this juncture grim old Andrew Jackson
demolished at a blow the great national bank. It
was the match to the train, although few saw the
mine it would explode. Between $40,000,000 and
$50,000,000 distributed to the State banks through-
out the country gave a momentary prosperity that
found vent in the gigantic bubble of land specula-
tion which the Specie Circular so woefully pricked.
Banks were asked to redeem their notes, but could
not, and then came the panic of 1837. Wall Street
felt the crash, but nevertheless her bankers were the
first to reopen their doors, and her capitalists the
first to regain their confidence. Long and slow was
the process of recuperation in the country at large ;
but through it all, with the banks of the West and
South opening one day only to suspend the next,
Wall Street continued evenly on its course, and the
completion in 1851 of the Erie Railroad to Dunkirk
shows how well her capitalists had retained their
faith and their courage.
The long drag of ten years, succeeded by an
equal period of prosperity struggling against bad
banking and ill-regulated finance, culminated in
1857. A branch office of the Ohio Life and Trust
Company was located in Wall Street, and from
there on the memorable 24th of August, 1857, issued
the news of its suspension. Like a house of cards
the great financial structure of the country came
tumbling down. Over-importations, with no com-
prehension of the effects of heavy and continued
gold shipments, joined to over-speculation and high
prices, may be said to have been primarily the cause
of the disaster. It was more severely felt in Wall
Street than its predecessor of a score of years before,
for the reason that it affected wider and more gen-
eral interests. The railroad, initiated in 1830,
accepted by 1835, and being pushed in every direc-
tion by 1857, was an interest with which, as to-day,
Wall Street was identified. By means of the tele-
graph, then lately brought into use, the dimensions
of the panic were thoroughly known in a week.
Failures aggregating $291,750,000 were reported
for the year, and Wall Street set itself to work to
repair the damage. Of what might have been, had
the troubles of 1860 never arisen, no one can say;
of what did occur history tells us plainly. The
government, harassed and embarrassed, turned to
Wall Street, and it did not seek in vain. Never did
a threatened power obtain freer or more speedy
relief. Obligations were fast maturing which the
government found no means to meet. Besides this,
vast sums were needed to carry on military opera-
tions. Not only the national credit, but the national
existence, was threatened.
In this emergency, Salmon P. Chase, Secretary
of the Treasury, communicated with John J. Cisco,
the subtreasurer of New York, to use his utmost
endeavors to raise the money necessary to sustain
the nation's credit. Mr. Cisco informed the banks
of the condition of the national finances and of his
instructions from Washington. He pointed out to
the leading operators and financiers that within a
72
ONE HUNDRED YEARS OF AMERICAN COMMERCE
few days interest on the accruing obligations of the
government would have to be paid or it must neces-
sarily go to protest. This was clearly one of the
most critical moments in the history of the nation,
and the crisis demanded sound judgment and
prompt action. The gravity of the situation was
clear to the bankers. The collapse of the govern-
ment's credit would endanger the perpetuity of our
very institutions. The foundation of all security
was threatened, and the destruction of all values
was imminent.
The outlook throughout the Union at that time
was dark, while all Europe looked on either in
apprehension or in hope that our political fabric
was going to pieces. But Wall Street took prompt
and united action to extricate the government from
its perilous position. The spirit of patriotism was
everywhere, and the great financial institutions of
the country responded with a heartiness that showed
their faith. The old Bowery Savings-Bank, one of
the richest, as it was one of the first, of such estab-
lishments in New York, voted in February, 1861, to
loan one half of all its funds to the government, and
this was accordingly done. It is difficult at the pres-
ent time, when four per cent, bonds of the United
States are selling daily in the market at twenty-one
per cent, premium, to estimate the courage that was
necessary at that period to resolve on such a course
as that followed by this bank. Government securi-
ties paying as high as seven and three tenths per
cent, interest were at that time at a substantial dis-
count, and it is matter of history that the issue, a
year later, of legal-tender notes, or "greenbacks,"
fundable in six per cent, bonds, was largely influ-
enced by the fact that except by such seemingly
arbitrary methods the loan could not have been se-
cured with either certainty or rapidity.
In the history of war-time finance, and the mea-
sures adopted under stress of the sternest necessity,
none was more lasting in its effects, nor greater in
the lengths to which it was ultimately carried, than
this authorization of the issue of legal-tender notes
—"greenbacks." When, in the autumn of 1861,
the bankers of the country had paid to the govern-
ment the last instalment of $50,000,000 of the
$150,000,000 in gold loaned, their condition was
one of extreme exhaustion. This money, disbursed
by the treasury to the army and navy, returned to
the banks but slowly, and the result of the drain
that it had produced was seen when, on December
30, 1 86 1, the banks suspended specie payment.
Of this $150,000,000 in gold thus lent the govern-
ment in the time of its direst need during the dark
days following the disaster of Bull Run, Wall Street
may pride itself on the fact that $105, 000,000 came
from its associated banks. The suspension of the
banks complicated the financial situation seemingly
beyond extrication. The maintenance of the army
and navy, which was synonymous with maintaining
the Union itself, was dependent upon a vast sum
being raised within three months. Therefore it was
as an expedient dictated solely by necessity and not
choice that the first Legal-Tender Act, providing
for an issue of treasury or government notes to the
value of $150,000,000, redeemable in six per cent,
twenty-year gold bonds, was passed, and signed by
President Lincoln, February 25, 1862. $50,000,000
of this issue, however, was to be in lieu of the trea-
sury demand notes authorized the previous July.
An issue of $500,000,000 in bonds bearing six per
cent, interest, and redeemable in five and payable
in twenty years, was also authorized by this act
for funding purposes. The first legal-tender notes
issued under the act bore the date March 10, 1862,
and none were of smaller denomination than $5.
Their effect in easing the pressure upon the treasury
was immediate. Within a month another and
smaller issue was declared, and on July nth a sec-
ond issue of $150,000,000 in notes of the same kind
was authorized, and bills of smaller denomination
than $5 were authorized. On March 3, 1863, a bill
was passed authorizing the $900,000,000 six per
cent, loan ; but, at the urgent request of Secretary
Chase, a clause was inserted leaving it optional with
the Secretary of the Treasury to permit the right of
holders to fund greenbacks into six per cent, gold
bonds. Under this new power greenbacks were
funded into sixes until January 21, 1864, when, the
original $500,000,000 issue of bonds having been
all taken up, the secretary decided that greenbacks
in future could only be funded in the five per cents.
The effect of this decision was to instantly and
seriously depress the value of the enormous paper
currency, and in it may be found the cause of much
of the manipulation which, using the premium on
gold as a leverage, shook and deranged values in
the money market for so many years.
It is thirty years now since the war closed, and
during that time there has been so much of notable
importance linked with Wall Street that only the
more prominent events need be mentioned. The
speculation in gold, giving the opportunity to un-
scrupulous operators to manipulate the stock market
for their own ends, culminated in " Black Friday,"
September 24, 1869, when many in Wall Street
began business in the morning as rich men and
ONE HUNDRED YEARS OF AMERICAN COMMERCE
73
went home ruined. Many versions of the causes
li.ive been given; but one thing remains certain:
that had not unnatural financial conditions permitted
the famous Gold Room to exist, the disaster would
never have occurred. It is always a situation of in-
calculable danger, when a nation's paper is at a dis-
count in her own markets. The next few years saw
no abatement of the troubles by which the financial
world was beset, and the rally which followed 1869
was but the comparative calm preceding the storm
which burst four years later. The great banking-
house of Jay Cooke & Co., staggering almost single-
handed under the terrible burden of the Northern
Pacific Railroad, precipitated the trouble in 1873.
Wall Street knew that a catastrophe was imminent,
but how to avert it was a problem.
As a bit of the unwritten history of that time, it
is related that a representative of one of the great
banking-houses in Wall Street, having formulated a
plan to relieve the tension, went to Washington to
lay it before the Secretary of the Treasury, William
A. Richardson. The latter declined to believe in
the gravity of the situation, and the banker gained
an audience with President Grant, to whom he re-
lated his fears of impending trouble and outlined
certain measures for relief. So much was the Pres-
ident impressed by the imminence of peril that he
not only gave the banker a letter to the Secretary,
requesting that official to give him a careful hear-
ing, but the President at once ordered the with-
drawal of his own private funds, a great part of
which, as it happened, was on deposit with the firm of
Jay Cooke & Company. How fortunate this action
of the President's was was shown when the very
next day the failure of the great banking-house was
announced.
The panic which this failure brought on was
sharp, as was the rally which followed and overdid
itself about ten years later, when over-extension
of railroads and incautious speculation brought a
relapse. In May, 1884, the failures of Grant &
Ward and the Marine Bank first alarmed the Street.
A few days elapsed without further serious trouble,
and then the Metropolitan Bank closed its doors
and the trouble became general. No less than
fifteen firms on the Stock Exchange failed during
this time.
It was in the panic of 1873 that the wonderful
power of the Clearing-House as exercised in the
issue of loan certificates was made manifest. This
power had already been appreciated as one of the
moving causes which had permitted Wall Street to
respond so readily to the government's demands for
large loans during the war, but its influence as a
factor in easing a tense market and relieving the
strain of panicky times was first learned in 1873,
when certificates aggregating $26,565,000 were
issued. Its second great manifestation was in 1884,
and its latest in 1893, which, following, as we have,
the course of financial crises since 1795, brings us
to the present time. This panic, from the effects
of which we are but now slowly recovering, had its
origin in many causes. Some solvent institutions
were forced to the wall through a general distrust
which compelled them to realize on good security
at a time when the market would not buy. In look-
ing for the causes of this distrust many things must
be considered. Tariff changes long impending pro-
voked a general feeling of uncertainty detrimental
to our commercial interests. The Silver Purchase
Law caused, in addition, distrust of our currency
both at home and abroad, causing the foreigner,
for that reason, added to his needs on account of
failures in South America, Australia, and Africa, to
send back our securities for sale, which caused large
shipments of gold out of the country. The Inter-
state Commerce Law and the State Railroad Com-
mission laws decreased the earnings of railroads.
The Reading Railroad receivership, which occurred
early in the year, was followed by others ; the failure
of the Cordage Company in April; the failure of
Western farm mortgage companies, caused by the
inability of farmers to pay interest and principal of
their mortgage loans ; the failure of banks, caused
by an unusual demand for deposits ; the hoarding of
currency withdrawn from banks, so that the premium
on it went up to five per cent., were all causes tend-
ing to the general disaster.
The issuance of Clearing-House certificates to
the amount of nearly $50,000,000 followed, which
tended to strengthen public confidence, or prevent it
from being wholly destroyed. All this happened be-
fore the people's attention was directed to the mod-
ification of the tariff which the election of the new
administration and House of Representatives indi-
cated. At and before the assembling of the new Con-
gress in December public attention was attracted to
the tariff, and this added to the distress; and to-
gether with continued failures of corporations, in-
dividuals, and railroads, the year 1893 closed in the
midst of gloom. The last week, when the Atchison
and New England railroads went into the receivers'
hands, was the bluest week the country experienced
in its history, unless the blue week in July may be
the exception.
Since then Wall Street and the government, or
ONE HUNDRED YEARS OF AMERICAN COMMERCE
rather the treasury, have been in more intimate
relation than at any other time since the Civil War.
The real necessity for this close connection is found,
perhaps, in those principles of national finance which
leave an unprotected treasury to bear the brunt of
attacks which it is powerless to avert. In this posi-
tion no more logical ally than Wall Street could be
found, despite the clamor of the uninformed ; and
in the work of the recent Bond Syndicate, headed
by J. Pierpont Morgan, has been given a demonstra-
tion of certain important economic and financial
principles never before correctly estimated. In the
preliminary steps leading up to the formation of
the Bond Syndicate of 1895 was demonstrated the
helplessness of the treasury, unaided, to control our
national finances. A depleted gold reserve in the
first month of 1894 was met by an issue in February
of $50,000,000 of bonds bearing five per cent, inter-
est, which sold at a sufficient premium to yield
$58,661,000 in gold to replenish the waning trea-
sury reserve.
The tide of exchange, always flowing outward in
the spring and summer, speedily lowered again the
gold reserve. From $106,527,068 in February, the
reserve had fallen to $52,189,500 early in August.
The movement of the crops turned the tide at
this juncture, but by October the reserve was only
$61,361,826, or far below its traditional limit of
$100,000,000 ; so a second bond issue was made in
November. $58,538,500 was netted by this sale,
and the gold reserve stood at $105,424,569. Then
came the most significant and disquieting event in
all our financial history. At a season of the year
when large exports of gold were scarcely to be ex-
pected there came a drain upon the treasury such
as had never before been known. Distrust and
rising excitement were visible everywhere ; less than
half the gold withdrawn was for export, the remain-
der was hoarded. In less than two months the gold
reserve fell to $44,705,967, and drastic measures
were required. It was evident that while the trea-
sury might continue selling bonds, it could not hold
the gold in reserve in the face of the prevailing rates
of exchange and the wide-spread distrust. Not only
was action required that would inspire immediate
confidence, but it must be also such as to sustain
that confidence by regulating foreign exchange.
This was the problem before the treasury in Feb-
ruary, 1895, and the Bond Syndicate, which came
forward to undertake the novel task, had far more
to overcome than was generally recognized. For
this syndicate to supply the treasury with gold was,
comparatively speaking, a simple matter; but for
them to so protect this reserve that it should not be
drained away as the proceeds of the previous bond
sales had been was a different matter. Nevertheless
this the syndicate undertook to do, and a contract
was entered into whereby the treasury bought from
them, by an issue of $62,317,500 in " coin " bonds,
3,500,000 ounces of gold, making the amount paid
by the syndicate for the bonds $65, 117, 500. From
February, when the agreement was entered into,
until the last week in June, when the final payment
into the treasury was made and the connection of
the Bond Syndicate with the government terminated,
this association kept the gold reserve above suspi-
cion, and their final payment left the treasury with
$107,512,362. How well they performed their
contract is shown in the fact that during April, May,
and June, when heavy gold shipments are always
made, they so regulated exchange that instead of
losing $45,000,000 of its reserve, as the treasury had
done during the same three months of the preceding
year, it actually increased it by $7,242,963. The
method of the syndicate was to meet the local needs
for exchange and to sell American securities abroad
in sufficient amounts to offset this exchange. This
it accomplished from February until the end of July.
By that time the movement of the crops should have
been sufficient to influence exchange in our favor,
but a delay of some three weeks in their shipment
caused a brief fall. Nevertheless the power of the
Bond Syndicate had been shown. It had done all
it had contracted to do, and revived the public con-
fidence at a time when it sadly drooped. It took
great risks, accomplished great good, and showed
again how far-reaching is the influence of Wall
Street. That the reserve of the treasury cannot re-
main where it placed it is no fault of the syndicate's.
The root of this evil lies far deeper — in the fallacies
of national finance; and the problem it presents
must some day be met and solved.
Without entering into any exhaustive argument of
a subject so vast as this, it may be said that at the
very base of the trouble are the greenback or legal-
tender and United States treasury notes. While the
aggregate of these is only about $500,000,000, their
actual volume is unlimited, for the reason that they
are redeemed only to be reissued. Like an endless
chain, these notes running in and out of the treasury
drain in a steady stream the nation's gold, of which
by far the greater part goes to foreign countries,
while our government, confronted with the task of
paying out gold to redeem notes it may not cancel,
has to borrow that its reserves and credit may be
maintained. The nation is in the position where it
ONE HUNDRED YEARS OF AMERICAN COMMERCE
75
has to give gold to all comers, but may not demand
it for itself, except in the duties of the custom-
houses. It is a fallacy which has already caused
great loss to our people, and unless speedy action
be taken will cause still more. It demands that
the treasury exercise banking functions that it was
never meant to have ; and until these so-called
legal tenders are retired it is hard to see how the
finances of this country can be either satisfactory
or sound.
If Wall Street was the sole reliance for supplies of
gold when it was required for export, it could pro-
tect itself from too great a drain by raising the rate
of discount, which would check imports and stimu-
late exports, thus giving the danger-signal to the
commercial classes, who are directly responsible for
the error of over-trading. The United States Trea-
sury, which does not discount commercial paper,
but has obligations outstanding in the form of legal
tender or treasury notes redeemable on demand, has
no means of protecting its reserve, which must be
paid as long as the demand for it continues or until
its stock of the metal is exhausted.
The work of the Bond Syndicate closes the chap-
ter of memorable events by which Wall Street has
risen to its present importance. A century ago
Lombard Street was the center of the world's
moneyed interests ; Wall Street hardly had an exis-
tence. To-day it rivals the former in many respects.
The Paris Bourse and the great centers of Berlin
and Vienna are as intimately connected with Wall
Street as with one another. A flurry in one center
reflects itself within the hour in all the others. The
Old World is coming to regard American securities
as the best and safest outlet for her investors. At
the present time Wall Street most certainly is the
channel leading to the richest and most profitable
fields of enterprise in the world. The railroads,
commerce, mines, and industries of our continent
serve as her sources of supply, and in their
development has been and will be still greater
wealth.
If in tracing this sketch of Wall Street I may have
seemed to infringe in some degree upon the domain
of national finance, it must be remembered that the
two are indissolubly linked together, and in the in-
tegrity of both lies the great safeguard of our coun-
try's prosperity.
CHAPTER XIII
ADVERTISING IN AMERICA
THE development— yes, even the continued
existence — of every industry described in
this work depends on the dissemination of in-
formation concerning it, and the resulting knowledge
of what it is and what it is doing. Such dissemina-
tion of information is advertising.
It may take myriad forms, — traveling representa-
tives ; exhibits at fairs, by window displays, or in
the stores of the retailers ; distribution of samples ;
circulation of catalogues, circulars, or other printed
and lithographed matter; advertisements in news-
papers ; signs, stationary and movable ; use of
"novelties," — but whatever it is, it is all advertising,
and, for want of a better term, may be defined as
"an effort to cause others to know," and which it
is hoped will also cause them to remember and do.
Emerson says we should read history actively
rather than passively ; that is, we should treat it as
a commentary on our own lives. While much his-
tory has in it nothing in common with our surround-
ings or purposes, and cannot, therefore, yield us
anything of direct value, the history of advertising,
being a record of the adaptation of business methods
to modern business conditions, is peculiarly rich in
helpful information, and a careful study of it in the
manner Emerson suggests should greatly benefit the
modern business man.
The advertising of the pre-printing period had, of
course, to be adapted to the conditions of that age ;
the crier, the carved sign, the crude poster, were
then the best means of conveying information to the
public. Even after the advent of the printing-press
and the newspaper the development of advertising
necessarily awaited the general education of the
masses. Book and paper were alike valueless to
those who could not read. How slowly conditions
changed may be gathered from the fact that the
Boston " News-Letter," the first paper in the country
to maintain publication, had only 300 subscribers
in 1744— forty years after its establishment.
76
A century's history of advertising in the United
States is a story of wonderful development ; but so
marvelous has been its growth during the last fifty
years that the record of the other fifty now seems
scarcely more than one of mere existence. Ameri-
can advertising has advanced along many lines,
concerning each of which much of interest might be
written.
Inasmuch as it has been estimated that more than
seventy-five per cent, of the amount expended for
American advertising is now paid to the newspapers,
— in which term are included the magazine, the
trade journal, and all other publications of the class
known as periodicals, — we will speak first of news-
paper advertising.
The wider use which it has attained over all other
methods is not to be accounted for on the ground
that newspaper advertising is a fashion or a fad.
Its wonderful use to-day, and the still more wonder-
ful future which awaits it, have for their enduring
foundation the fact that newspaper advertising
appeals to human intelligence by the great method
through which information will for all time be com-
municated— the printed page. The plain millions
of America are an ever-reading, ever-wanting, ever-
buying people, and the business man who realizes
all three of these facts can but recognize the reason-
ableness of newspaper advertising as a means of
telling others what he has and what he is doing.
Newspaper advertising could not, of course, exist
apart from the newspaper press. So closely are
they related, that the growth of the former cannot
be adequately set forth without some reference to
the latter. This accounts for the appearance here
of a few newspaper statistics, which may be found
in more complete form in the able article on news-
papers elsewhere in this work.
In 1795, at the beginning of the period covered
by this work, there were in this country about 200
newspapers. In 1810 there were 366 ; in 1820, 700
ONE HUNDRED YEARS OF AMERICAN COMMERCE
77
(estimated); in 1830,1000 (estimated); in 1840, press. Comparative statistics of this character have
1403; in 1850, 2526; in 1860, 3343; in 1870, been gathered only three times. The first effort
5871 ; in 1880, 11,314; in 1890, 17,712; in 1895, was in 1828, when the number of newspapers and
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20,217. Dividing the century equally, the growth periodicals in the world was 3168, of which 800
in each half is about 1000 per cent. (twenty-five per cent.) were published in America;
It will be interesting at this point to consider the in 1866 the total number was estimated at 12,500,
position which the United States occupies in relation and of these America claimed 5000 ; the count
to the rest of the world in the extent of its newspaper made in 1882 showed a total of 25,766, of which
78
ONE HUNDRED YEARS OF AMERICAN COMMERCE
11,000 were published in the United States; at the
present time the whole number is probably in the
neighborhood of 40,000, of which more than one
half are published in this country.
The first daily in the United States was the
"American Daily Advertiser," of Philadelphia,
established in 1784, of which the "North Ameri-
can " of that city is the direct lineal descendant.
The following year the " Daily Advertiser," New
York, was started. We reproduce on preceding page
the first page of this paper, date of March 7, 1795.
To-day we have upward of 2000 dailies.
The first newspaper advertisement in America
appeared in the Boston " News-Letter," established
in 1 704, a two-page paper, printed on a sheet eight
inches by twelve, two columns to the page. It had
but one advertisement, which read as follows :
"This NEWS-LETTER is to be continued
Weekly, and all persons who have any Houses,
Lands, Tenements, Farms, Ships, Vessels, Goods,
Wares or Merchandizes, &c., to be Sold or Let ; or
Servants Runaway, or Goods, Stole or Lost; may
have the same inserted at a Reasonable Rate from
TWELVE PENCE TO FIVE SHILLINGS
AND NOT EXCEED. Who may agree with
John Campbell, Postmaster of Boston. All Persons
in Town and County may have said NEWS-LET-
TER every Week, Yearly, upon reasonable terms,
agreeing with John Campbell, Postmaster for the
same."
The earliest recorded instance of the publication
of any number of advertisements was in the " New
England Weekly Journal," of Boston, established in
1728, a two-page sheet, seven inches by thirteen.
The news in this paper was all foreign, and from
three to four months old. The advertisements were
of books, coffee importations, runaway slaves, sales
of negro girls, and a notice of a school for negroes.
Beyond this there was nothing but obituaries and
the sailing and arrival of vessels. But notwithstand-
ing these early instances of the use of advertisements,
American advertising cannot be said to have begun
before 1788, and then only in a very humble way,
the advertisements being confined almost entirely
to the classes just enumerated. These conditions
continued until about 1820, when greater promi-
nence began to be given to news. Hitherto the
columns not devoted to advertising had been largely
filled with elaborate treatises on party principles and
politics, and articles on literary and scientific sub-
jects; but as the news columns became fuller and
more interesting, the number of subscribers and
readers increased, and the growth of the advertising
patronage kept pace with both. The rapid increase
of newspaper advertising may, however, be said to
date from the establishment of the "Sun," New
York, in 1833 ; the " Herald," New York, in 1835 ;
the "Public Ledger," Philadelphia, in 1836; and
the "Tribune," New York, in 1841.
Leading metropolitan papers of to-day carry dur-
ing the week from fifteen to forty columns of adver-
tisements, while their big Sunday editions frequently
have over 100 columns each. In a recent exami-
nation of an ordinary week-day issue of ten leading
dailies selected from different sections of the country,
the space occupied by advertisements ranged from
twenty-five per cent, to seventy per cent., the aver-
age of the ten being forty per cent.
In the beginning of the century advertising was
almost exclusively local ; but to-day newspaper ad-
vertising divides itself, naturally and perhaps quite
equally, into two classes — local and general. Local
advertising portrays the activities of the locality.
These find expression in the myriad "want" ad-
vertisements and other classified announcements,
for the gathering of which numerous branch offices
are maintained, and the services of local and district
telegraph companies employed ; and as well in the
large daily announcements of the leading retailers,
from some of whom single papers are said to receive
an annual income approximating $50,000.
General advertising, on the other hand, voices the
enterprise of the business man anywhere who be-
lieves he has that which is really wanted otherwhere.
By such advertising, and with moderate outlay,
almost numberless articles, otherwise little known,
have been brought into general use throughout the
country, and in like manner some of the most
remarkable commercial successes of the century
have been achieved. General advertising ranges
from the advertisement of the dealer, who seeks to
make direct sales to the consumer, to that of the
manufacturer who annually expends from $500,000
to $750,000 to acquaint people with the name and
merits of an article which can be procured only
through the retailer. It has grown of late years to
such dimensions that many papers find it profitable
to employ one or more representatives whose only
duty is to present the claims of the publication to
advertisers.
Just as the marvelous strides by which American
journalism has outstripped the journalism of all the
rest of the world could never have been possible
except for the marvelous patronage of American
advertisers, so there would never have been such
wonderful growth in advertising except for the men
ONE HUNDRED YEARS OK AMERICAN COMMERCE
n
whose ability and energy have been entirely and
untiringly devoted to the promotion of newspaper
advertising. From the small beginning of special
representation of a few papers, there has grown the
advertising agency system of to-day, which well
deserves recognition among American industries.
There are probably more than fifty concerns in the
United States trading as newspaper advertising
agents, and to at least thirty of them the leading
mercantile agencies accord recognition and commer-
cial rating. The aggregate of capital invested runs
into the millions, and one or more representatives
of the industry are to be found in every prominent
newspaper center.
The first beginning in this line was made in
Philadelphia, in 1840, by Volney B. Palmer, who
afterward established branches in New York and
Boston. The S. R. Niles Agency was an outgrowth
of the Boston branch, and, with a record of honor-
able dealing through all these years, still continues
business. Mr. W. W. Sharpe, of New York, com-
menced as a boy in Mr. Palmer's employ, and
to-day does business under the style of W. W.
Sharpe & Company. Mr. S. M. Pettingill, of New
York, was also employed by Mr. Palmer, and with
Mr. Bates carried on the business there established.
The Bates & Morse Advertising Agency was their
legitimate successor, and this business is now con-
tinued by the Lyman D. Morse Agency. The
business at Philadelphia was likewise carried on
continuously and with constant growth, until in
1878 it was absorbed, by purchase, into the business
of N. W. Ayer & Son, who are to-day recognized
leaders in this line. Some idea of the magnitude of
their business can be gathered from the fact that
their outlay for clerical help during 1895 will fall
little, if any, below $100,000.
As in the enormous growth of the advertising in-
terest the advertising agency became an important
factor as well as a necessary result, so the newspaper
guide or directory was a necessity to, as well as an
outgrowth of, the exigencies of the agency. At the
first the agencies guarded with jealous care their
lists of the papers of the country, but the rapid
multiplication of papers soon necessitated printed
lists ; and as the preparation of these lists necessi-
tated the expenditure of large sums of money, the
agents finally concluded to give them to the public,
and solicit advertisements from the newspaper pub-
lishers to help pay their cost.
The first attempt was the " Newspaper Record,"
containing lists of newspapers and periodicals in the
United States, Canada, and Great Britain, by Lay
& Brother, Philadelphia, in 1856. The first per-
manent publication of this character, however, the
" American Newspaper Directory," was started in
New York, in 1869, by George P. Rowell & Com-
pany, newspaper advertising agents, who have con-
tinued the publication regularly to this date. In
1880, N. W. Ayer & Son, of Philadelphia, began the
publication of the " American Newspaper Annual,"
which has been regularly issued since. In addition
to these two directories, Pettingill & Company, of
Boston, publish a very commendable handbook,
while Dauchy & Company and J. Walter Thomp-
son, of New York, and Lord & Thomas, of Chicago,
all widely known advertising agents, with some
others of lesser repute, publish manuals, more or less
pretentious, varying in contents and make-up accord-
ing to the publisher's conception of the needs of the
advertiser.
Perhaps no better general idea can be obtained
of the great extent of the newspaper press of the
United States, and of the vastness of its advertising
patronage, than by an examination and study of the
most complete of these publications. It is almost
impossible for one not familiar with the book to
appreciate the amount of labor and expense which
its annual revision involves. Hourly changes are
going on in all parts of the country: changes of
location, changes in editors, changes in size, price,
or day of publication ; consolidations ; removals ;
suspensions. When it is known that about 4000
publications are started annually, and that, owing
to suspensions and consolidations, the net annual
increase in seasons of business prosperity ranges
from 750 to 1000, even the uninitiated can appreci-
ate in some degree the immensity of the undertaking,
and the greatness of the industry that renders the
publication of such books not only advisable, but
absolutely necessary. The newspaper directory is
as essential to the general advertiser as are the
reports of the great mercantile agencies to the busi-
ness man.
An important factor in the spread of advertising
has been the cooperative newspaper, known to
printers and advertisers as " patent insides " or
" patent outsides " — a system which has had all its
growth within the last twenty-five years. Under
this system half-printed sheets are supplied to the
offices from which, after the printing of the other
half, the papers are issued. The cost of type-setting
is reduced to a minimum, because the reading mat-
ter, with slight variations, is the same in all papers
issued from any one house. This and the wholesale
purchase of paper, together with the income from
80
ONE HUNDRED YEARS OF AMERICAN COMMERCE
the advertising, make it possible to supply the half-
printed sheets at a price scarcely more than the
ordinary cost of white paper. It is readily apparent
that this whole system is contingent upon newspaper
advertising. Except for the income from the ad-
vertising, the system could not exist. Except for
the system, hundreds of small places over the coun-
try could not sustain the local papers which they
now issue. There are at present nearly 8000 such
papers published, — more than one third of the entire
number of the newspaper press of the country, — and
consequently a large amount of money is annually
expended for advertising in them.
Magazine advertising is only about twenty-five
years old. Although there were successful maga-
zines before that time, they did not admit advertise-
ments. It was with the appearance of the " Cen-
tury " (then called "Scribner's Monthly"), in 1870,
that the new order of things came in. Its first
number contained advertisements, which have stead-
ily increased in quantity, until its issue of December,
1894, contained 134 pages of them. In 1882, after
thirty-two successful years without them, Messrs.
Harper & Brothers yielded to the inevitable and
began the insertion of advertisements in their " New
Monthly Magazine." Here, too, the increase in
quantity was rapid, reaching 144 pages in the num-
ber of December, 1894. At the page rate of $250
the advertising income of such an issue would be
$36,000. Putting the average amount of advertis-
ing the year through at 92 pages per month, the ad-
vertising receipts of this one magazine for one year
would reach $276,000. It is estimated that the
December, 1894, issues of six leading monthly mag-
azines represented an advertising investment of
more than $180,000. There are, of course, a great
many other excellent publications of this class which
cannot here be mentioned, but which are widely
recognized as advertising mediums of great value.
It is said that Mr. Gladstone prefers the American
to the English edition of such of our magazines as
print both, for the reason that the advertisements in
the American editions are so interesting, and set
forth so clearly the enterprise and progress of our
country. Thousands of people have made the same
discovery as the great English statesman and stu-
dent of human affairs. The truth is that the public
has to-day a great and growing interest in the infor-
mation which we call advertising, and the newspa-
pers and periodicals themselves would feel bound to
print much of it as news, did they not print it in the
form of advertisements.
The trade journal is an interesting illustration of
specialization. Starting with the papers which at.
tempt to set forth the condition and movement of
trade in general, — of which class the " New York
Prices Current " (from an old issue of which we re-
produce a page) was one hundred years ago, as it
is to-day, a good example, — it has followed the
branching out of each particular industry, keeping
close step with its progress, until to-day there is
scarcely a manufacturing or commercial interest but
has its representative journal, and often several of
them, whose reading and advertising columns alike
are of value chiefly to its own special class of readers.
In early days a certain amount of advertising
went with each subscription. For instance, one
hundred years ago the payment by a merchant of a
certain sum to the " Shipping List " as a subscription,
carried with it the privilege of the use of all needed
advertising space during the same period. That
this privilege was not overworked is perhaps as
forceful proof as can be given that the value of such
advertising yet lacked recognition.
That space itself then had no fixed value may be
seen from the announcements in the " New Jersey
Journal," of Elizabethtown, on January 16,
1790, that "advertisements of A MODERATE
LENGTH will be inserted three weeks for eight
shillings, and two shillings for each insertion after-
ward."
While newspaper space to-day very often sells at
a fixed rate, the fixing of that rate is very arbitrary.
The most mentioned factors are quantity of cir-
culation, character of readers, and control of the
field. The price of newspaper space has advanced
greatly with its wider use. The "Herald," New
York, and " Public Ledger," Philadelphia, having
always enjoyed liberal advertising patronage, are
good illustrations of this. Established in 1835 and
1836 respectively, they both at first charged for
advertising fifty cents per square per insertion. The
square was for a long time the unit of measurement,
and fifty cents was for a long time the rate per
square ; but the square itself gradually shrank in size
with the flying years, until from being nineteen agate
lines in 1836 in the "Ledger," in 1863 it equaled
only four agate lines. This, of course, was twelve
and one half cents per agate line. The minimum
price soon climbed to twenty cents in the " Ledger "
and forty-five cents in the " Herald," at which it
stands to-day, showing an increase in the sixty years
of 750 and 1800 per cent, respectively.
While the price of advertising has been advancing,
the size of the papers has been increased many
times also. These enlargements have in almost
FRANCIS WAYI.AND AVER.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
81
every case been made necessary by the encroach-
ment of the advertising upon the reading columns.
In some instances the paper would become three
fourths advertising, then an enlargement would fol-
low which would relieve the condition until the
ever-flowing, ever-growing stream of trade again
filled its columns. The average daily edition of the
The, New-York
ffcbliflied every MONDAY by JAMES ORAM,
umns. There are, even now, conspicuous exceptions
to the rule above stated. A number of the most
successful publications have obtained very unusual
circulation, in very unusual time, by means of
advertising in the columns of their contemporaries.
A notable instance is the " Ladies' Home Journal,"
of Philadelphia, whose 750,000 circulation has been
Prices Current.
3 Dill, ptr aim.}
MONDAY, JANUARY 9. 1797.
No. 33, Liberty .ftreet, near Mr. Ctnj D***i.
[No. 5J.
CHAMBER tf COMMERCE.
Memt&ly Ctmmittet.
TnffT?l!TLACT BACHt,
ROBIKT BOWNI,
CnAM,It L. 'CXMMAN,
NEH'.rOKK PRICE *f STOCKS,
MONDAY, Jim. 9.
U.S. Bank Stock, 11 p. ct.
New. York, - ig
6 per Cent. . ifi/j
COURSE •/ EXCHAKCl.
MoKDAY fjnt. 9.
Billi on London, 60 rfij'i fght,
5 per cent, under par.
On AmftcrJam, 60 dayj fight, 4,0
DAVID GftlM.
Deferred, - i<y*9
cents per guild, at Co diy* credit*
WHOLESALE PRICES, .carefully corrcfted— In Dollirs and Cents.
From To From To From To
ASHES* **,
ton.
D.C
190
D. C
•9S
Checfc, Englifli, .
_^_
rt. c.
2;
D.C
3
Floor, Superfine, -
all
D.C
p. c.
Pearl,
___
none.
American,
'!
Common, -
10 i
Allum, *
Almond), - %
Cwt
Ib.
7 J"
8
22
Chocolate, •
Cloves, . . ,
^~
2
I 2
I 3
Virginia Flour.,
Middling, .
10
6
..„
Anchor*, - -.
«.
ib
Coal. Foreign,
Clul
IO
10 50
Cornell, .
LV
2
Arrack, -
Gal,
none.
Virginia,
9
9 5c
Buikwheatj
3 5
BACON, -
Ib.
la
Cocoa, Surinam,
Cwt
11
22
Rye,
u.
7
Barley, (Scotch) -
7
1
IJland,
20
Indian meal,
MI
5 ^
r - --
Brim, white,
bufh.
' 37
Copper In DicetJ,
b.
29
•"UTS, Otter,
skin
i
4
Beef, Cargo,
Prinx,
bbl.
9 jo
10 50
10
II
Copperas
Coffee, for export.
Cwt
b.
2 31
ao
Z JC
3
Fifher,
Miok,
a
l
Mcft,
1! randy,)) re. id proof
Gal.
1 ;c
It
Cordagf,
Cwt
b.
'3 75
6
IJ
8
Martin*
Red Fox, *.
—
i
15
09
1 : j
id proof,
5«
Cotton, Georgia,
28
CroG-Fox, -
5°
3d proof,
66
i 68
Bahama,
—
JS
Grey Fox, .
7C
4tS proof,
81
i 87
W. I (land,
30
WiWC.it, .
^^
j.
K
Spanish, i ft proof.
37
« 44
St . Domingo,
3>
37
Lucifc Cat, -
f
3 'JO
id proof,
5°
Demarara.
35
37
MiifkratV ..
._ —
14
3d proof,
59
Surinam,
4'
Racoon,
1
4thpioof,
BrizHmo, -
Ton.
75
75
So
Cayenne,
DUCK, American,
Bolt
37
2 50
41
Bear, North.
Wolf,
7S
z
4 JO
Bread, Pilot,
Cwt
9 5C
10
Ruffia, .'-
5
8
Beaver, North.
b.
1 2
2 f o
Middling/
7
7 50
Ravens, -
12
2 JO
ShiP, ,
Crttken, .
Urin, (flruck mrjf.
>U£!
4 75
75
27
81
EngHm.No.l,
Rnflia Sheetings,
FLAX-SEED, -
rard
'iece
Bulb
34
7
2 JO
7 jo
SE'NEVA,Hol!an<i
Calk,
jrrtin,
(Jail.
6 i;
i iS
...
Brinutone, Roll, .
-wt
J
Flax,
Ib.
1 1
M
Wheat, North.
R.if!,
one.
Butter, for export.
Ib.
14
J j
61
South
i 87
CANDLES, dipt,
lbv
IJ
•"uftic
Ton.
o
2J
Rye,
i 11
mould.
'7
Fi(h, Cod, dry, -
one.
4.
Sperm.
—
•53
do. pwLJed, -
.!•!.
J
5 5C
Oats,
.50
tj
•CafCa, * ,
• —
5«
Salmon,
9 5°
0
Corn, North, (new)
Open,
Cwor, .
Bou
Ib.
' 5'
a cd
•t?
do. finoakf d,
Mackarcl -
Herrinct.
Piece
bbl.
40
9
f
45
e'ac
Sou:h. (old)
>unpowder, Fngl.
TT
l f
6,
j ,
f
fc
" Herald " and the " Ledger " is now perhaps eleven
times the size of their first number, with the adver-
tising barometer steadily on the rise. In this respect
the two papers named are not exceptional, but
rather good examples of prosperous journals the
country through.
The development of newspaper advertising has
been so rapid that many newspapers themselves
have not yet caught up with it ; that is to say, while
they all freely recommend it to other people for the
improvement of their business, but comparatively
few employ it for the development of their own.
This, of course, refers to advertising in other journals
— not to the exploiting of a paper in its own col-
largely obtained and maintained by newspaper ad-
vertising.
Some attempts have lately been made to introduce
color-work into the display of newspaper advertise-
ments. This has generally taken the form of covers
for special editions of newspapers and periodicals.
Quite recently a large newspaper advertiser has been
using color printing on colored paper for inserts in
the leading magazines. This is regarded as a sig-
nificant innovation. The wide use of color print-
ing in the regular issues of daily papers, however,
awaits the overcoming of mechanical and financial
obstacles.
We have no means of knowing what was the
ONE HUNDRED YEARS OF AMERICAN COMMERCE
value of the advertising in the newspapers of 1795,
but the Tenth United States Census gives the value
of advertisements in the American press in 1880 at
$39,136,306, and the next census shows that these
figures had increased in 1890 to $71,243,361 — a
gain of eighty-two per cent, in ten years. We are
justified in believing that the value to-day is con-
siderably over $100,000,000 — a notable result of a
century of progress!
Perhaps nothing has done more to develop news-
papers, and therefore newspaper advertising, than
the railroads, whose remarkable story is told else-
where in this volume. Perhaps, also, nothing has
done more to develop the railroads than the news-
paper. Each without the other would seem to be
as ineffective as a half-pair of scissors ; but worked
together they have cut the restraining cords of en-
vironment and made possible the greatest national
and individual prosperity. With the newspapers to
tell of affairs and trade, and the railroads to carry
persons and things, in spite of our wide territory, we
really touch elbows with one another, and the future
greatness of our commercial interests is beyond pre-
diction. But of one thing we may feel certain : " the
best is yet to be."
When the business man of an earlier time put an
advertisement in the newspapers, what he inserted
was often an inventory of his leading articles — a
sign, so to speak, showing the nature of the business
carried on at the address indicated. The prepara-
tion of such an advertisement required no special
ability. Then, again, he generally expected what
he put in the paper to stay there for a long time.
This fact also contributed to make his newspaper
advertising of very little trouble to him.
But a change of ideas of what an advertisement
should be, and how it should be used, brought into
existence what are to-day two prominent features
of advertising, viz., the advertisement writer and the
paper devoted to advertising. The advertisement
writer is an outgrowth of very recent years. The
fierceness of competition and the increasing cost of
newspaper space have made attractive, interesting,
truthful, and convincing advertisements a necessity.
The advertisement writer studies to supply this need.
That he well supplies it must be evident to any
reader of to-day's advertisements. Many an adver-
tisement now represents far more thought than has
been used in a corresponding space in any other
part of the publication.
The good advertisement writer must of necessity
be able to see and to tell very clearly. The really
capable ones are in demand, and receive good pay.
Some business houses employ one exclusively ;
others use the services of those who write for any
one on order. The leading advertising agencies
also have them in their employ. Their work is
telling for the better on American advertising.
Papers devoted exclusively to the subject of ad-
vertising have appeared in the last ten years. There
are to-day perhaps a dozen of these, the largest
number of them being connected more or less
intimately with some particular advertising agency.
In so far as they point out methods of proved suc-
cess, publish unbiased statements, and call wider at-
tention to the common-sense nature of newspaper
advertising, they do the community a service; but
to whatever extent they air the foolishness of the
"ad. smith," with his "catchy" and "fortune-
bringing " advertisement, or circulate ill-informed or
ill-intended criticism, they do injury to the greatest
business-getting method of modern times. We be-
lieve those familiar with them will agree that these
journals are as a class growing broader in their
treatment of newspaper advertising, better recogniz-
ing its seriousness and its dignity. They certainly
have great responsibility, as they receive very care-
ful reading and are the exponents of a most useful
business idea.
The trade catalogue, always a useful business
adjunct, has in recent years been transformed into
what is often a work of beauty and interest, reflect-
ing credit on all concerned, and materially increas-
ing trade. The "descriptive circular" which the
advertiser of other days was wont to offer his readers
has been to a large extent superseded by the busi-
ness primer, booklet, or brochure, which is now a
distinct feature in general advertising. It grew out
of recognition of the fact that everything cannot
be told in an advertisement. Perceiving that the
prime object of a newspaper advertisement is ac-
complished when the reader has by replying to it
singled himself out from the mass of mankind and
placed himself within reach of correspondence or
representatives, the bright advertiser employs these
publications to give details and to further or com-
plete sales. To their preparation the best writing,
illustrating, and printing skill is often brought, with
the result that their value in advertising has now
become widely recognized. It is impossible to
estimate closely the amount annually expended in
advertising matter of this class, but the figures are
certainly enormous.
Reference should here be made to lithographic
printing, which now covers an annual expenditure
estimated at more than $15,000,000. Most of this
ONE HUNDRED YEARS OF AMERICAN COMMERCE
output is intended for advertising purposes. Cards,
folders, hangers, banners, albums, booklets, and
posters are produced by the million. The work as
a class is artistic and attractive, while competition
and ingenuity have greatly cheapened its cost and
widened its use.
The use of posters for advertising is of course
very old. The practice has not only grown greatly,
but many of the posters themselves have of recent
date possessed great artistic merit. The poster, as
its name implies, was originally an announcement
intended to be posted or put up in a certain place,
and it was therefore for a long time confined to local
use. About twenty-five years ago it transpired that
the effectiveness of a poster was often increased by
its being placed in unusual positions. This led to
sign painting, which in turn has become a recog-
nized method of general advertising. To-day the
most effective and ingenious use is made of blank
walls, barns, etc., for acquainting the public with
various articles. The employment of natural scenery
as a background for this work has fallen under
public disapprobation, and appears to be going into
disuse.
Another development of this outdoor work is the
erection and painting of large bulletin-boards along
the lines of railroads and great travel. These are
leased by the year to advertisers. Such a sign-
board, thirty feet long and four feet high, costs the
advertiser $30 a year. Perhaps $1,250,000 are
spent annually in all kinds of out-of-door painting,
exclusive of the bill posting above referred to.
Street-car advertising may be said to be a devel-
opment of the last fifteen years. During the first
half of this period it received practically nothing but
local patronage. About seven years ago the inven-
tion of the now everywhere common curved car-
rack, because of the uniformity in the size of cards
which it secures, opened the method to the use of
general advertisers, who were not slow to avail
themselves of it. From that time the growth has
been very rapid, until to-day there are perhaps in
this country 15,000 street-cars carrying advertise-
ments. At $100 per year per car this would make
the annual advertising expenditure $1,500,000.
Enterprise is ever seeking expression. Advertis-
ing has always been the expression of enterprise.
The few meager, colorless announcements of 1795,
written with a dull and heavy pen, fittingly expressed
the enterprise of that day. At the close of a cen-
tury of marvelous progress the enterprise of to-day
finds expression in advertising of every conceivable
form, in every available place, in the preparation
and illustration of which have been combined the
best obtainable skill of hand and brain.
Great as has been the evolution of a hundred in-
dustries in a hundred years, wonderful as has been
the advance in the arts and sciences, the printing-
press has always led the way, and is to-day the
herald and helper of them all. Its usefulness will
still further increase with the discharge of its duty,
which will be to tell the story of the better things
which the opening century will unfold to the better-
seeking millions of America.
CHAPTER XIV
FIRE AND MARINE INSURANCE
AERICAN fire and marine insurance business
had its birth at about the close of the eigh-
teenth century. Both kept in the forefront
of American affairs for many years, but marine insur-
ance suffered heavily when the American flag began
to disappear from the high seas. For the past
quarter of a century it has had a hard struggle to
keep itself anywhere near the old standard of pros-
perity. To do this it has had to draw for the
greater part of its returns upon foreign commerce,
and been forced to compete with English companies.
Fire-insurance has not, as a whole, fared much better.
So distinct are the differences in the business
operations of these two lines of insurance that it is
necessary to treat of each separately. The theory
of fire-insurance is exceedingly simple — it collects
from the many and distributes to the few, relying
for its profit upon an intelligent calculation of the
chances of fire and the collection of more than it
distributes. The sources of profit are twofold : first,
interest upon invested funds ; second, excess pre-
mium receipts over losses and expenses.
Reviewing the history of fire underwriting for the
past century, it cannot be classed as one of the
profitable departments of business activity. A cer-
tain number of companies have been successful, but
only a very insignificant percentage of the various
companies organized in the United States during
the past century have sustained life for a score of
years. Only one American company which was in
existence in 1795 is now in successful operation.
It is the Insurance Company of North America, of
Philadelphia, organized in 1794, and which now
has a cash capital of $3,000,000, with total assets
of nearly $10,000,000.
The large conflagrations of the century at New
York, Chicago, Boston, Philadelphia, Portland, and
Pittsburg each in turn crippled all interested com-
panies and ruined many; but, as experience is a
dear but a sure teacher, these fires brought about
needed improvements in municipal fire departments,
and led to new safeguards in underwriting. At the
time of the great New York fire in 1835 there were
about forty companies doing business in the city,
and all but two found themselves hopelessly in debt
when the blaze had burned itself out. The two
companies spared were the Bowery Fire and the
Jefferson, which had not taken many risks down-
town, in which section of the city the fire raged.
To save the companies from utter ruin the legisla-
ture passed an act on February 20, 1836, allowing
them to take what assets they had and pay their
losses, without interfering with their charters. This
privilege was granted for a limited period. About
ten companies availed themselves of this opportu-
nity, and then obtained a new capital and continued
in business. Twenty-eight of the remaining thirty
companies never recovered from the blow. The
company paying the greatest percentage of losses
was the Howard, which gave fifty-eight per cent.
To-day there are only two companies — the Eagle
Fire and the North River — in existence that sur-
vived the conflagration of 1835. Ten years later
there was another great fire in New York, in which
the damage was also large ; but neither the public
nor the insurance companies suffered as much com-
paratively, owing to more careful underwriting. The
fire of 1845 brought about a schedule of new tariff
rates, which lasted until 1850.
The Chicago fire of 1871 was the most disastrous
conflagration underwriters have ever known. It has
been accurately estimated that $118,000,000 worth
of property was destroyed, on which the insurance
amounted to $92,000,000. Of this sum companies
outside of the State of Illinois had written $58,144,-
ooo, and while the exact amount held by Illinois
companies could never be ascertained, it was calcu-
lated to be $33,878,000. $39,233,000 was paid to
the assured by the companies outside of the State.
About every insurance company involved in the fire
84
HENRY H. HALL.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
was forced to make assessments on its stockholders
in order to live. Credit is due to the Liverpool,
London & Globe Insurance Company for their
promptness in paying the amount of their losses at
Chicago ; but to the Home of New York, ALtna. of
Hartford, as well as to many other American com-
panies, equal credit is due. The strength of many
American companies was manifested by this severe
trial, and the necessity for foreign capital was fully
demonstrated. It is safe to say that over one
hundred companies were driven to the wall, while
every company in the State of Illinois was wiped
out. Shortly after the Chicago fire came the great
Boston fire, both preceded by the one in Portland,
each adding its proportion to the general wreck of
fire-insurance companies.
It may therefore be very readily seen that the
business of fire underwriting in the United States for
the past century has been done at a loss, and the
most successful companies, as a whole, have not
retained more than simple interest upon their capi-
tal and invested funds. The question has been
asked many times, Why cannot this important inter-
est be placed on such foundations as to present a
reasonable hope of profit to capitalists on their
investment? The chief obstacle to this attainment
has been the ignorance of legislators. Every year
the fire-insurance interest runs the gauntlet of the
legislatures of all the States, protecting themselves
from attacks made with a persistency born of igno-
rance, suspicion, and prejudice. Every recurring
legislature is freighted with schemes without num-
ber to " regulate " the fire-insurance business. To
the average legislator there is just enough mystery
about the business to tempt him to the same mental
exertion he displays on the " Thirteen Puzzle " and
in squaring the circle.
Every insurance company must exhibit for publi-
cation its premiums and losses in every State where
it transacts business, and every detail of its manage-
ment is open to public inspection. It is a blow to
all originality, a handicap to enterprise, when skill
and knowledge gained by experience are thus given
to every competitor ; but this, even, does not satisfy
our lawmakers. Various schemes of taxation are
devised, State and municipal, to which are added all
the forms of restrictive legislation that the mind of
man can conceive. In many States insurance com-
panies are denied recourse to the United States
courts, must submit to policy forms drafted by the
various legislatures, and are compelled to adopt such
methods of loss adjustment as can be comprehended
by the feeblest lawmaking mind. The history of
fire underwriting for the past century is a record of
the incapacity of American legislators.
The aggregate fire premiums collected annually
in the United States amount approximately to
$140,000,000. This is a tax levied upon every
property owner in the United States. If complaint
is made of the expense of continuing the fire-insur-
ance business, it should be recalled that the fire-
insurance capital of the world is at the command
of the resident of the smallest village. With few
exceptions, the largest manufacturing plant can
secure in the village in which it is located ample
insurance from the strongest companies in the
world ; and if loss occurs, the same is adjusted and
paid on the ground. To afford these facilities vast
and expensive organizations are necessary. Every
important insurance company has a large staff of
special agents and adjusters, and in addition to this
there are many associations to advance the interest
of associate companies. Among these is the National
Board of Fire Underwriters, composed of the lead-
ing companies of the country, which was organized
in 1866. The chief work of this organization is on
the line of public benefit, such as the recommenda-
tion of proper building laws to the various munici-
palities of the country; the inspection of all fire
departments, with suggestions for their improvement
and the increase of their efficiency ; and the arrest
and punishment of incendiaries. Through the
efforts of this board the people have been educated
as to the true economy of good building laws and
efficient fire departments. Within the past few
years the board has maintained an electrical bureau,
and by experiments and investigation has done
much to minimize the hazard incident to the gen-
eral use of electricity for light and power. With
great labor and expense it is endeavoring to awaken
public interest to the great drain on the national
resources by the annual fire waste, so large a portion
of which is due to careless building and lax munici-
pal administration. In addition to this organization
the fire underwriters maintain in every State and in
every town local boards of underwriters, for the
collection of statistics, upon which equitable rates
can alone be predicated.
Through the influence of the New York Board of
Fire Underwriters a paid fire department for the city
of New York was secured. The fire-insurance
companies are also maintaining, at their own ex-
pense, fire patrols in thirty of the large cities. These
patrols are established by law, and supported entirely
by the fire-insurance companies transacting the busi-
ness in their several localities. New York City was
86
ONE HUNDRED YEARS OF AMERICAN COMMERCE
the pioneer in the establishment of these organi-
zations, and they are organized to protect life and
property at fires, regardless of the insurance interest
therein ; and the New York Board of Fire Under-
writers has already distributed numerous gold med-
als to its patrolmen for heroic efforts in the saving
of life. Fire underwriters stand unrivaled by any
form of purely business association in their success-
ful efforts for the general good.
Reviewing the history of fire underwriting for the
past century, there can be observed a steady advance
in the methods and practice of the business. There
must always be an element of chance in its conduct,
but there has been a gradual advance to a more
scientific basis of action. In the past fifty years
there has been a complete change in the controlling
principles of the business. The older method was
to "accept the risk as you find it," and charge
accordingly. The more modern method is to sug-
gest improvements, with a view to a lower rate and
larger liability. To make this more clear, in days
past, underwriters would accept a small " line " on a
poor risk at a high rate ; but the present method
is to decline it altogether and suggest improve-
ments, and, when made, give a lower rate and larger
line.
The fire underwriters now maintain several very
expensive organizations of expert surveyors for the
sole purpose of instructing manufacturers as to the
best means of fire protection, that the lowest rate of
fire-insurance may be secured. This entire change
of method is due to the influence of the New Eng-
land system of mutual insurance ; and it is but sim-
ple justice to these companies, of which Edward
Atkinson is now the official head, that this recogni-
tion should be made.
The conflict between projectile and armor-plate
is no more interesting than the constant combat be-
tween increase in the size of buildings and growth
of cities, and the improvement in fire-extinguishing
facilities shown by the development of the New
England system. The inception of this system was
due to the lack of proper recognition by stock com-
panies of improved appliances for the-extinguishing
of fire. A manufacturer, having introduced a fire-
pump in his mill, asked for a reduction of rate for
this appliance. It was denied. Other manufac-
turers were interested, and, having equipped their
mills with fire-pumps, a mutual company was organ-
ized ; and from that time there has been a constant
study to reduce the fire hazard, and to secure insur-
ance indemnity at least cost by the agency of a
mutual system. From a simple pump to perforated
sprinklers, thence by various improved devices to
the present perfected automatic sprinkler head, were
gradual steps in the line of defense against fire.
The general introduction of automatic sprinklers
has not only reduced the fire waste, but will eventu-
ally (with slow-burning construction) revolutionize
the practice of fire underwriting; for, with less
liability to fire, the stronger companies will increase
their acceptances on individual risks, thus concen-
trating the business in a smaller number of com-
panies, and reducing competition and expense.
Starting from the change in the conception of the
province of the underwriters, the advance to the
present practice is plain and logical. In former
times the underwriters would promulgate minimum
rates for various classes of merchandise — sole-
leather, package dry-goods, etc. Upon each of
these various classes a uniform rate would be made
for brick and frame buildings. Assuming the rate
to be adequate to pay the losses and a profit on this
class, this system was clearly inequitable. If the
stock of one merchant was in a two-story brick
building of small area, with no open skylights, etc.,
it was certainly unfair to charge him the same rate
as the merchant whose stock was in a higher and
larger building, with skylights, wood cornice, and
well-holes. To rectify this and similar cases of in-
equality a plan of schedule rating was put in force
by General Arthur C. Ducat, of Chicago. While
surveyor of the Chicago Board of Fire Underwriters
he formulated a plan of schedule rating, constructing
a theoretically perfect building, and adding for defi-
ciencies of construction. Within the past few years
this system of schedule rating has been elaborated
by President F. C. Moore, of the Continental Insur-
ance Company, of New York. A universal mercan-
tile schedule has been devised by him, which adopts
the same principle for various classes of towns and
cities. This system has already been adopted by
local underwriters in several of the larger cities.
The application of this principle will lead to a grad-
ual improvement in the construction of buildings,
and ultimately to the modern " fire-proof," or, more
correctly, " buildings of slow-burning construction."
In the line of schedule rating, and a corollary
thereto, is the general introduction of the " coinsur-
ance clause." With the improvement in the con-
struction of buildings and the increased efficiency of
fire departments, and with the aid of fire patrols, it
is expected (and to some degree realized) that the
percentage of loss by fire will be reduced — a fact
that many property owners have not failed to
appreciate, and many have inclined toward a reduc-
ONE HUNDRED YEARS OF AMERICAN COMMERCE
87
tion of the percentage of insurance carried to valu-
ation.
Fire-insurance rates, to be equitable, must not
only be predicated upon the construction and en-
vironment of each building insured, but must also
have relation to the percentage of insurance to value
carried by the merchant. The sole object of the
various forms of coinsurance clauses insisted upon
by fire underwriters is to secure a uniform practice
upon the part of property owners as to the percen-
tage of values insured.
Each State has an insurance department, to which
all classes of insurance companies doing business in
the State must make an annual statement of their
financial condition. The head of such department
is charged by statute with the duty of determining
the solvency of every company applying for permis-
sion to transact business in his State, as well as
at the time of the renewal of the annual license.
The system of State supervision was first adopted
by the States of New York and Massachusetts ; and
the policy adopted by William Barnes and Elizur
Wright, respectively superintendents of the insurance
departments of the States named, for the govern-
ment of such departments has been generally fol-
lowed, and in the main the standard of personal and
official probity established by these gentlemen has
been observed, with a few monumental exceptions.
There is no class of government officials, either
State or national, in whom is vested such autocratic
power as is accorded the superintendents of the in-
surance departments of the various States. This
power, exercised wisely in the protection of the pub-
lic against fraudulent institutions, is beneficent and
mutually advantageous to the reputable companies
and the public ; but when exerted in securing and
publishing the smallest detail of management, it is a
barrier to proper development, and when exerted
corruptly it becomes legalized blackmail, of which,
unfortunately, there have been a few instances.
The business of insurance supports many trade
papers, many of them useful and edited with great
skill and ability. The "Insurance Cyclopedia"
(published by the " Weekly Underwriter," one of
the best insurance journals) gives a list of fifty-one
such papers now regularly issued. Fire-insurance
is now conducted throughout the United States by
thousands of agents, and the percentage of funds
lost through misappropriation is infinitesimal. These
agents, as a rule, are selected with great care.
From the ranks of insurance agents have sprung
governors of States, judges, senators, and foreign
ministers.
At the present time there are five British com-
panies engaged in the business of fire underwriting
in the United States that have been continuously in
business for over a century, to wit : London Assur-
ance Corporation, organized 1720; Norwich Union
Insurance Company, organized 1797; Phoenix As-
surance Company, organized 1792 ; Sun Fire Office,
organized 1710; Union Assurance Society, organized
1714. To-day the fire-insurance companies of
foreign countries transact twenty per cent, of the
entire business of fire underwriting in the United
States.
The distribution of the risks assumed by the fire-
insurance companies doing business in the United
States is shown by the following table of the amount
at risk and premiums collected in 1 894 :
AMOUNT AT RISK.
PREMIUMS.
Alabama
$66,828,364
$1. 067.44C
Alaska
1,110,545
23,726
Arizona
A, 7 I O, ^68
IOC 4C4
Arkansas
32,620,429
7O;. 3Q8
California.
777.813.802
Colorado
85,894,340
1,422,026
Connecticut
221,828,297
2,171,851
Delaware . . ,
IQ.67Q.838
I ?6 1 1 7
District of Columbia
75,148,286
47?.?O2
26,698 005
cn6 77C
Georgia
138,769,873
1,905,826
Idaho
c, 007.466
1SI.O7Q
04.6.661 803
II,8o5 *?O
Indian Territory . .
4, c 70.368
I2?.6l4
Indiana
268,107,483
3,480,419
272. OI I QCQ
3.86? 471
Kansas
I4O, IO9,8O2
1,961,450
l8?. 3Q7 787
2.6o? 337
IQ7.442 627
2.64Q 323
Maine
04,80,4. 47 C
I.477.28Q
Maryland
214,414,675
1,859,261
687.417.. 28l
7,648,208
Michigan
283,738,338
4,302,988
Minnesota
233,942,097
3,680,966
Mississippi
37,951,832
787,985
348,602,501
4,903,494
Montana
26,852,407
626,905
107,641,249
1,816,538
Nevada
4,182,969
119,813
64,784. C7I
853,063
433,4C7,6CQ
3.73?, 083
7,302,979
147,579
New York
3.078.604. 7OC
22.33Q.42O
48,274,243
783.7(;i
North Dakota
18,088,057
3QO.C76
Ohio
C.64,Q2C, QIO
6. 74Q. 33?
4,438,202
II4,O75
Oregon
45,287,428
936,068
886.271. 7^0
Q, 8o8,<;72
00.474, C. 3.2
Q4O,O?4
South Carolina
43,057,308
639,698
South Dakota
1 8. 74?. 334
306.04.7
115,880,325
1,784,281
179,937,487
3,217,273
Utah
20,644,800
357,886
3 3,878, 28Q
512,612
1 10,663,406
1,598,356
Washington
54,018,972
1,181,901
3Q,O34,CC4
476,487
Wisconsin
21C. 243,70?
4,237,866
Wyoming
6,922,024
132,262
ONE HUNDRED YEARS OF AMERICAN COMMERCE
The history of American marine insurance begins
in 1793, when the General Assembly of Pennsyl-
vania chartered the Insurance Company of North
America. This company is still in existence, and
its long life is in a measure due to its special charter
privileges of being able to conduct a marine as well
as a fire insurance business. In 1796 the second
marine-insurance company was formed under the
name of the New York Insurance Company, with a
capital of $500,000. Since that time twenty-seven
other marine companies have been organized and
commenced business in New York State, and of
this number only one, the Atlantic Mutual, which
was chartered in 1842, is still in operation.
New York's marine-insurance history is that of
all the other seaboard States, for in nearly all marine
insurance once flourished, but has now succumbed
to English competition. The golden period of
American marine insurance was between the years
1840 and 1860, when the clipper sailing ship was
developed and perfected. In those times the lead-
ing merchants owned their own ships, and frequently
a member of the firm would go to China or the
East Indies to supervise the proper distribution of
the cargo, and to secure a remunerative one for the
return. The ship and cargo were insured with an
American company, and as it might be as long as
nine months before the vessel was heard from, the
risk was considerable and rates were high. As
much as five or six per cent, was charged for insur-
ance in those times. The rate on dry-goods from
Liverpool to New York in the old packet sailing
ships was placed at two per cent. This trade was
carried in American ships, and the insurance, both
on the vessel and on the cargo, was naturally placed
in American companies.
But the rates of insurance have changed with the
transformation of the ocean carrying service. The
East India goods are now shipped across the Pacific
to San Francisco, and thence East via rail. The
cost of insurance on these is now only three quar-
ters of one per cent. Rates on the Atlantic have
likewise declined. Insurance on dry-goods and like
merchandise carried in the modern "liners" is
placed at two tenths of one per cent. In other
classes of goods depreciation in rates is in like pro-
portion.
Marine underwriters do not ascribe the decline in
American marine insurance to any trouble from
unwise laws or legislative interference, but to the
changed business conditions and to English compe-
tition. The bulk of the carrying trade of the world
has passed into British hands, and a British mer-
chant and ship owner insures in a British company.
The English marine companies have, as well, invaded
American soil, and have secured a large portion of
the American business. When the English com-
panies first established themselves in America, along
in the early seventies, they began cutting rates.
The American companies did not effect any com-
bination to prevent this, but followed their example.
The American companies were also placed some-
what at a disadvantage by the laws governing the
admission of foreign marine-insurance corporations.
The foreign companies are required to make a
deposit before they can write American business ;
but in New York State, which has stringent insur-
ance laws, the amount is fixed at the minimum
capitalization allowed a home company, viz., $200,-
ooo. So much of the carrying trade of the world
is done under the British flag and with the aid of
British credit, and with countries under British con-
trol, that the American underwriter, working against
all these disadvantages, is seriously handicapped.
Therefore, there being no national or local tariff asso-
ciations among marine underwriters, the American
companies are worsted in this rate war. There
are now not enough of them to form any sort of an
association which would wield much power.
Despite the uphill work of the American com-
panies to hold their own, through loss of prestige
on the ocean and active rivalry on land, there are a
number of stock and mutual American marine-insur-
ance companies which continue to do a flourishing
business. The largest and one of the oldest is the
Atlantic Mutual, of New York, which has over
$12,000,000 of assets, and has been most carefully
managed throughout its career. It was formed in
1842, at the time when many stock companies were
turned into mutual companies, and by which change
the profits accrue to the policy holders instead of
the stockholders. The company is noted for retain-
ing its faithful and tried officers until their death.
The late John P. Jones was connected with the
company for fifty years, and was its president for
forty. In his life-work of building up the company
he was ably assisted by Vice-Presidents W. H. H.
Moore and A. A. Raven, who have been with the
company thirty and forty years respectively. Among
the other large companies which still do a thriving
business are the two Boston corporations, the China
Mutual and the Boston Marine.
There have never been many marine Lloyds in
the United States, though this form of marine insur-
ance has been most in vogue in marine underwriting
in Great Britain. The origin of the term is both
ONE HUNDRED YEARS OF AMERICAN COMMERCE
SUMMARY OF RISKS IN FORCE AND PREMIUMS CHARGED THEREON DECEMBER 31, 1889, BY THE
FIRE, OCEAN MARINE, AND INLAND NAVIGATION AND TRANSPORTATION INSURANCE
COMPANIES TRANSACTING BUSINESS IN THE UNITED STATES.
BY CLASSES.
CLASSES AND STATES IN
WHICH HOME OFFICES ARE
LOCATED.
NUMBER
OF
COM-
PANIES.
FIRE, OCEAN MARINE, AND IN-
LAND RISKS IN FORCE, AND
PREMIUMS CHARGED THEREON,
DECEMBER 31, 1889.
CLASSES AND STATES IN
WHICH HOME OFFICES ARE
LOCATED.
NUMBER
OF
COM-
PANIES.
FIRE, OCEAN MARINE, AND IN-
LAND RISKS IN FoKCE, AND
PREMIUMS CHARGED THEREON,
DECEMBER 31, 1889.
AMOUNT IN
FORCE.
PREMIUM!
CHARGED.
AMOUNT IN
FORCE.
I'REMIUMI
CHARGED.
Total
1,926
$18,691434,190
$211424,242
Class 3 A
5
$127,613,864
$',730,377
Class I
Maine
434
'5.4I3.429.842
174,201,696
i
2
2
152
1,748406
7,949,890
117,915,568
971,866,938
135,000
194,076
1,401,301
23fr»007
Alabama
7
i
ii
i
10
ii
1
'6
10
12
'16
2
14
>S
3
•1
4
•j
10
57
3
i
'29
'6
342
3
i
'6
'4
2
'I
I
8
"6
39
^
3
30,789,209
383,678,2^8
4,788,204
1.359,878,764
37-754,794
29431,941
342,381,1^6
10,172,607
173,392,934
65-045.177
144,181430
1,885,379
111,536402
406,517,661
59,517482
113,469,208
5,038,207
76,252,301
46,163,699
163,398,665
282,878,026
4,965,230,523
2,787430
8,300
213,216,829
22,147,389
1,785,670413
136,689,339
62406
16,636,119
32,4-<4,8o8
8,898,345
428,382
14,061
5>803.335
74.907
16,399,218
198455
453.182
5,459474
99,630
3,243,525
908,167
2,161,380
126,526
820,519
5,597,740
764,025
1,506,046
108,940
1,028,840
885,966
2,062401
2,884,863
46,021,786
60413
304
2,623,036
655-94S
24,211,683
1,679,380
840
405,580
525,685
223,219
Class 4
Connecticut
District of Columbia. .
Connecticut
I
3
2
I
'II
'2
5
2
3
10
21
2
12
7
10
12
,I7
3 I9
I
I
*I
*I
2
3
I
2
I,28l
9.277.077
25,988,388
'3-7 '5.239
20435,693
33,321,034
4,040,998
22476,902
4,391.567
5-709452
47,297,788
269,167,557
12,062,098
54,330,327
11,481,171
31,118,584
145,245,931
75,075.375
99,510,249
19,291414
3.543,955
256,294
93.406
25,688
241,213
M9'.233
327,800
1,207,608
84,217
37.933
920,895
4,013430
612,156
1,778,083
"89,053
2,265,924
1,354,681
1,001,589
2,590,723
175,023
60,305
Delaware
District of Columbia .
Georgia
Illinois
Indiana
Iowa
Kansas
,, i j
Kentucky
Maryland
Massachusetts
rg*m
Minnesota
Missouri
New Hampshire. . . .
New Jersey
New Hampshire ....
New York
Ohio
Pennsylvania
XT *t, |2 Y
Rhode Island
South Carolina
Tennessee
Texas
Vermont
49,999,981
11,121,594
79,35°
3.184,314
1,561,418,038
5,005,211
45,822
692
121,028
830,771
Virginia
West Virginia
Wisconsin
Tennessee
Class 5 6
Texas
Utah
Vermont
Virginia
2,805495
33,316,514
2,092,760
14,997402
207,431,944
4,120,105,263
25,360,152
3i>279
663,102
53,677
611,252
2,698,181
42,706,752
464,512
Connecticut
16
'187
»6o
127
ii
3 29
7
jg
60
386
6 27
10
30
•i
86
2 178
4
i
'8
'II
i
'181
78,308,021
2,889,971
84,166,658
30,261,418
65,200,389
3.063,307
10433,819
11,250,866
36,528,277
102,592,626
165412,143
23,979.024
6,778,874
6,3364'5
11,781,011
36456,381
136,919,53°
342,074
106461,569
462,333,093
35.3'2,684
818,775
640,334
22,047,364
610,000
120493415
Washington
West Virginia
Wisconsin
Foreign
Class 2
,
i
2
5'
3>5«2,38o
21,847,772
591,745,356
218,118
246,394
10,596,879
Maryland
,, V ' ' "
Massachusetts
place i
Minnesota
Georgia
i
8
33
i
i
i
8
3
2
4
5
12
2
525,221
3L989479
576,650
1,628,000
535,725
1,287-253
242,331,706
6,101,882
7,189441
6,699,941
14448,211
, 273449,172
4,982,675
5,172
926,303
20,585
70,100
111,772
128,712
5,34',230
158,722
865,984
93-775
171,130
2,546,264
157,13°
Illinois
New Hampshire . . .
Indiana
Iowa
Kansas
North Dakota
Ohio
830,771
Massachusetts
Pennsylvania
Minnesota
South Carolina ....
South Dakota
Ohio
Rhode Island
West Virginia .
Wisconsin
1 Includes i company for which no report is made.
2 Includes 3 companies for which no report is made.
3 Includes 2 companies from whom a statement of risks in force could
not be obtained.
* Only i company reported and that too incompletely to tabulate.
5 Includes 4 companies which could not report risks in force.
6 The companies of this class, as a rule, charge no premiums, but
assess for losses.
Includes 6 companies from which no report was received.
90
ONE HUNDRED YEARS OF AMERICAN COMMERCE
interesting and peculiar. The name of Lloyd orig-
inated in old Lloyd's Tavern, in Tower Street,
London, far back in the days of good Queen Anne.
It was the practice of many ship owners and trad-
ers to drop in at the tavern and talk over their pro-
spective profits ; and gradually a custom developed
of inscribing their names on a blackboard, certifying
that the men signing would be jointly liable for the
loss of a vessel during a certain voyage. From this
crude beginning have grown the world-famous as-
sociations in the British Isles. In the United States
there are a few Lloyds, two of the principal ones
being located in New York City— the United States
Lloyds and the New York Marine Underwriters.
The scope and definition of a marine policy is, of
course, entirely different from a land fire policy.
The risks insured against are many, and may be
summarized as including all perils of the sea. There
are two classes — a voyage and a time policy; the
former is generally used in insuring vessels, and the
latter for cargoes. There are naturally many clauses
governing marine-insurance policies, such as capture,
seizure, war, and so on. The life of the insurance
on a ship begins at the port from which it is insured
until moored for twenty-four hours at the port to
which it is insured. When an insurance is made
on freight to be carried under a charter, the policy
attaches as soon as the vessel sails, although she
may be destined to a distant port for her cargo.
Though single losses to marine underwriters have
been small, compared with some of those of fire
underwriters, there have been shipwrecks that have
lived in marine-insurance men's memories. One of
the greatest losses to American marine insurance
was that of the American steamer Central America,
which foundered off the Cuban coast in September,
1857. The Central America was bound from
Aspinwall, now Colon, to New York, and was
loaded principally with treasure from the California
gold-mines. She carried insurance amounting to
between $700,000 and $800,000, all of which had
to be paid by American underwriters. Another
notable loss was that of the steamer Erie, which
sailed from Pernambuco, Brazil, loaded with coffee,
on January i, 1893, and was burned at sea. Coffee
prices were high in those days, and the Erie went
down with $500,000 insurance.
Two losses which not only made inroads on the
American marine companies, but which also seri-
ously crippled the growth of American steam trans-
atlantic service, were the sinking of the steamer
Arctic, off Newfoundland, in 1854, by collision, and
the disappearance of the steamship Pacific, which
sailed from Liverpool for New York in January,
1856, and was never heard from. Both steamships
belonged to the Collins Line, which was the first
one to put on steam-vessels for the Atlantic trade.
These early losses were particularly detrimental to
American marine insurance, because the companies
carried extremely heavy lines in those days. Among
the recent heavy losses was that of the steamer
Oregon, which was run into and sunk off the Long
Island coast in 1886. American marine underwrit-
ers had between $700,000 and $800,000 on the
Oregon's cargo. The loss of the Oregon also showed
underwriters how quickly even a properly con-
structed iron ship sinks. The introduction of iron
in place of wood for building vessels has not made
any material difference in the rates of insurance, for
iron has hazards which wood has not, and vice versa.
As to the future of American marine underwrit-
ing, it is difficult to prophesy. As trade follows the
flag, so marine insurance flourishes in the country
with a prosperous merchant marine. The United
States is again forging to the front as a great ship-
building nation, and this gives American marine
underwriters hope that American marine insurance
may follow in the wake of the growth of American
ship building.
The United States census of 1890 gives the sta-
tistics of the fire-insurance interest at the close of that
year, which may be found in the table on page 6.
The following classification is employed in that
table :
Class i. — Companies having a joint-stock capi-
tal, and doing either a fire, ocean marine, or inland
navigation and transportation insurance business.
Class 2. — Companies having guaranty capital, and
doing either a fire, ocean marine, or inland naviga-
tion and transportation insurance business.
Class 3. — Companies doing a fire-insurance busi-
ness on the mutual plan and insuring only manufac-
turing property.
Class 3 A. — Companies doing a marine-insurance
business on the mutual plan and insuring ocean-ma-
rine risks.
Class 4. — Companies doing a fire-insurance busi-
ness on the mutual plan and insuring all kinds of
property on land.
Class 5. — Companies doing a fire-insurance busi-
ness on the mutual plan and insuring only dwellings
and contents and farm property.
CHAPTER XV
LIFE-INSURANCE
IT is a singular fact that the doctrine of chances,
upon which the science of life-contingencies is
based, had its origin in the solution of problems
connected with games of hazard. It happened in
this way. In the year 1654, the .Chevalier Me're', of
Paris, an ardent gamester, applied to the celebrated
Abbe Pascal for solutions of two problems for which
he himself was unable to find answers.
His first problem was to ascertain in how many
casts of two dice one might bet with advantage that
two sixes would be thrown. The second was to find
a rule for dividing the stakes between two players,
should a game of hazard be interrupted, in the exact
proportion to their relative chances of winning at
the moment of interruption. Pascal considered all
possible combinations in casts of two dice, and all
possible changes which might occur in an unfin-
ished game, and was thus enabled to solve the two
problems. He illustrated his solution by casts of
dice. While in a single cast the chance that an ace
would be thrown is just one out of six, in a suffi-
ciently large number of casts the number of aces
would be precisely one sixth of the whole number.
Generalizing, Pascal proved that, by observing a
sufficiently large number of happenings in the past,
he could, with great precision, predict the number
of happenings which would occur under similar cir-
cumstances in the future, and he thus enunciated
the theory or doctrine of chances. Thus, if it were
ascertained that out of a large number of persons
of a given age, similarly situated as regards health,
occupation, climatic influences, etc., a certain num-
ber had died in one year, the percentage of deaths
in a given time, under similar circumstances, could be
predicted with precision, provided the number were
large enough to secure a proper average. Hence
the solution of problems connected with trivial games
of hazard led to the discovery of the laws of chance,
upon which, as an exact science, was built up not
only the theory of life-contingencies, but also of
all astronomical calculations. By means of careful
observations as to the rates of mortality which have
prevailed among a vast number of insured lives, at
all ages and in different circumstances, we can fore-
tell, with almost absolute accuracy, the rates of
mortality which will be experienced under similar
conditions in the future. In other words, while
nothing is more uncertain than the duration of a
single life, nothing is more certain than the number
of deaths which will happen in a given time, among
a large number of persons under known conditions.
Hence life-insurance has for its basis an exact
science, depending upon inflexible laws of nature ;
so that it has been well said by the late Professor De
Morgan, of London, an eminent authority, " There is
nothing in the commercial world which approaches,
even remotely, the security of a well-established life-
office."
In an abstract or mathematical sense, life-insur-
ance is a bet or a series of bets. The individual
bets the insurance office that he will die within one
year ; the office bets the individual that he will not die
within that time. The stakes, called the premiums,
are accurately and equitably adjusted — one is bound
to win, the other to lose. The office gives to the
individual the right to make a series of similar bets
during each of the remaining years of his life, or for
a limited period.
In a concrete or moral sense, life-insurance is pre-
cisely the reverse of gambling — unless, indeed, the
individual who neglects to protect those dependent
upon him from pecuniary loss in the event of his
own death, and thus assumes the risks of loss to
them, is a gambler.
Life-insurance is one of the most beneficent de-
vices of modern civilization. By its means the
pecuniary loss and hardship which would result to a
family from the death of its natural protector are as-
sumed by a vast number of persons, upon each of
whom such loss falls lightly. It is benevolence
without ostentation, and charity without humiliation.
It is practically a fulfilment of the divine injunction
91
92
ONE HUNDRED YEARS OF AMERICAN COMMERCE
to " bear one another's burdens," and is therefore an
evidence of the highest Christian civilization.
Important as was this discovery by Pascal, it
attracted but little attention until 1671, when the
Grand Pensionary De Witt, of Holland, celebrated
alike as a statesman and a mathematician, conceived
the idea of applying the doctrine of chances to the
valuation of annuities. From the registers of births
and deaths in several towns in Holland he deduced
rates of mortality, or probabilities of living and dy-
ing for each age. In a report to the States-General
in April of that year he computed the value of
annuities for the several ages. This report is valu-
able as the first instance of the application of scien-
tific principles to the solution of questions depending
upon the contingencies of living and dying, com-
bined with the improvement of money by interest.
De Witt's report was lost to the public for one
hundred and eighty years, or until 1851, when it
was recovered through the perseverance and skill
of Mr. Augustus Hendricks, actuary of the London,
Liverpool and Globe Insurance Company, and at
one time president of the Institute of Actuaries,
London.
In 1693, the illustrious Halley, astronomer royal
of Great Britain, constructed the first complete
table of mortality, in a form which has ever since
been followed, showing for each age the chances of
living and dying, with various monetary values de-
duced therefrom. Halley's table was based upon
the records of births and deaths in London and in
Breslau. It was more than half a century afterward
before Halley's labors were applied to any work of
importance. As life-insurance became better known
and appreciated the necessity of accurate tables of
mortality became more evident. The following list
comprises the principal mortality tables which have
at any time been used by life-insurance companies :
1. The Northampton Table, based upon an enu-
meration of the deaths in that town for the forty-six
years prior to 1780, constructed by Dr. Richard
Price. As the number of persons living in these years
was not known, but merely assumed, this table was
quite inaccurate ; yet it was used as a basis of values
for many years by insurance companies, and by
courts of law in the determination of insurance pre-
miums, annuities, and rights of dower. It was used
in the determination and distribution of the surplus
of the Equitable, of London, as late as the year 1889.
2. The Carlisle Table, based upon the numbers of
both living and dying in the city of Carlisle during
eight years prior to 1787. This table was con-
structed in 1815 by Joshua Milne, actuary of the
Sun Life-Office, and was, for a full half-century, the
standard adopted by British and American life-
insurance companies. A great variety of monetary
values were computed upon this table, and a vast
number of insurance contracts were based upon it.
3. The Actuaries' or Combined Experience Table,
deduced from the mortality of seventeen British life-
insurance companies, embracing 83,905 assured
lives. This table was constructed in 1845, by the
late Jenken Jones, actuary of the Guardian Assur-
ance Company. It is valuable as being the first
important table based upon the actual mortality
among persons whose lives were insured. Although
the Actuaries' Table has long since become obsolete
in Great Britain, it has been adopted, and is still used,
as the official standard of valuation by Massachu-
setts and by several other state insurance depart-
ments.
4. The HM (Healthy Male) Table, based upon
the later experience of twenty British companies, em-
bracing the mortality among 147,000 insured lives,
and completed in 1869, under the supervision of a
committee of the Institute of Actuaries. Elaborate
monetary values have been computed upon this
table, which are embodied in the " Text-book " by
George King, actuary of the Atlas. This table has
long been the vade-mecum with actuaries, and until
it shall be superseded by tables based on later and
more extended observations will be the most reliable
standard of value in Great Britain.
5. The American Experience Table (so called),
constructed by the writer, and based upon the
mortality experience of the Mutual Life-Insurance
Company, of New York, during its first fifteen years.
Confirmed as it has been by later and more exten-
sive observations upon the mortality in that and in
other American companies, this table is unquestion-
ably the best exponent of rates of mortality which
may be expected to prevail among insured lives in
the United States. Rates of premium and estimates
of the value of contingent insurance liabilities in
nearly all American companies are based upon this
table, which is also the official standard of insurance
valuations in many of the States.
The origin of life-insurance is lost in antiquity.
At a very early period the lives of masters of vessels
and of merchants voyaging with them were insured,
always for brief periods and generally by individual
underwriters, against death or captivity by pirates.
In the middle of the sixteenth century, lives of persons
were insured for short periods by individual under-
writers, who divided the risks among themselves
very much in the manner of the modern Lloyd's.
SlIEPPARD HoMANS.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
03
The earliest life-insurance policy on record was
issued June 15, 1583, by the Office of Insurance
within the Royal Exchange, London, upon the life
of one William Gybbons. The insurance was for
twelve months for ^383 6s. 8</., at a premium of
eight per cent. The policy was underwritten by
thirteen different persons, who guaranteed sums
varying from ^£25 to ^£50 each. The oldest exist-
ing office, which transacted at any time a life-insur-
ance business, is the Hand-in-Hand, London, char-
tered in 1696 ; but its first life-insurance policy was
not issued until 1836. The earliest purely life-
insurance company was established in 1 699, under
the name of the Society of Assurance for Widows
and Orphans. This association had a brief exis-
tence. The celebrated Amicable Society for a Per-
petual Assurance was chartered March 25, 1706,
by Queen Anne. This society carried on the busi-
ness of life-insurance for one hundred and sixty years,
or until 1836, when, under an act of Parliament, it
passed out of existence as a separate institution and
was merged into the Norwich Union Life-Office.
In the year 1721, there were founded two insurance
offices, still existing, the Royal Exchange and the
London Assurance Corporation, each of which at
once issued life-policies, and each has continued to
do so until the present time. They are therefore the
oldest existing offices writing life-insurance contracts,
but their principal business has always been that of
marine and fire insurance. All of the offices above
named charged a uniform rate of premium for all
ages of about five per cent, until after the com-
mencement of the present century, and their business
was conducted upon methods very similar to those
practised by modern assessment associations.
In 1762, the famous Equitable Society for the
Assurance of Life and Survivorship, of London,
commenced business. This society was founded
upon the recommendation of Dr. Richard Price,
with the view of charging rates of premium adjusted
to chances of living and dying at the different ages.
In other words, its business was from the first con-
ducted on sound principles. The society has had
from the outset a phenomenal success. It has never
employed agents or paid commissions or solicited
business. It has always been managed with great
ability, and is still pointed out with pride as the
" Old Equitable." It has led the way in many of
the advances and improvements in the system. In
the amount of business transacted it has been dis-
tanced by many modern offices ; and although its
volume has greatly diminished since its maximum,
about 1816, it is now increasing quite rapidly. The
Equitable, of London, is not, however, as has gen-
erally been assumed, the oldest office in existence
doing a purely life-insurance business. That honor
is due to a little American office in Philadelphia, Pa.,
called the Presbyterian Ministers' Fund, organized
in 1759, or three years before the Equitable, of Lon-
don. It has, for one hundred and thirty-six years,
pursued quietly, unostentatiously, and without in-
terruption the business of life-insurance. In the
Papers and Transactions of the Actuarial Society of
America, No. 2, page 83, may be found a facsimile
of a policy issued by the Presbyterian Ministers'
Fund, dated May 22, 1761, on the life of Rev.
Francis Allison. In consideration of a premium of
^6 annually, it provided for the payment, after his
death, of^2o annually, for a stated number of years,
to his widow and orphans. The premiums were
based upon the hypothesis of De Moivre, the rates
being level for life. It is, therefore, the oldest
purely life-insurance company in existence. It has
ever kept pace with modern improvements in the
science of life-contingencies, and is to-day in a sound
condition, with every prospect of continued success.
After the formation of the Equitable, of London,
in 1762, came the Pelican, in 1797, the London, the
Provident, and the Rock, in 1806, and new offices
were started in almost every subsequent year. There
were founded during the present century, in Great
Britain, about three hundred and seventy life-offices,
out of which only eighty-eight, according to the
Parliamentary Return for 1894, remain. The others
have had, generally, an ephemeral existence. Some
have been wound up voluntarily, some by processes
of law, some have been merged into stronger or
better-organized institutions, and all have suffered
penalties from the violation of sound principles of
science and commercial experience.
On the continent of Europe, life-insurance has
been a plant of slower growth and development.
Many strong offices have been built up in France,
Germany, Holland, Belgium, and Austria, with a few
in the other kingdoms. It is in the United States
and in Great Britain, however, that the system has
flourished and attained its highest development.
In the United States, the Presbyterian Ministers'
Fund was, as stated, organized in 1759, and is still
in existence. The Baltimore Life was organized in
1831, and was merged into the Equitable in 1860.
But modern life-insurance dates from 1843, when
the Mutual Life-insurance Company, of New York,
first commenced business. This great company, in
volume of assets the largest in the world, issued its
first policy February i, 1843. It is organized upon
94
ONE HUNDRED YEARS OF AMERICAN COMMERCE
the mutual plan, having no capital, and its enor-
mous accumulations ($203,822,134 on December
31, 1894) have resulted entirely from insurance
premiums and interest thereon, after deducting pay-
ments for death-claims and expenses.
This company was organized by friends of the late
Morris Robinson, solely to give a position to that
gentleman. Its affairs were managed with great
skill by him and by his successors in the office of
president, the late Joseph B. Collins and Frederick
S. Winston. Under the present incumbent, Mr.
Richard A. McCurdy, the business and accumula-
tions are rapidly increasing. The history of the
Mutual Life-Insurance Company is a record of
phenomenal success, resulting from the application
of science and sound business principles to the most
important economy of modern times, by men of ex-
ceptional ability, energy, and business training. The
American Experience Table of Mortality, so called,
constructed, in 1 858, by the writer, and since adopted
by all American companies and by many of the
States as a standard of valuation for premiums and
liabilities, was deduced from the mortality records
of this company. The " Contribution Plan " of
dividing surplus equitably among the members of
a life-insurance company was first applied by the
writer in the distribution of the surplus of the
Mutual Life in 1863. When we consider the vast
amount of surplus now held for policy-holders by
American companies, amounting to more than
$112,000,000, in addition to over $325,000,000 of
surplus already awarded and paid to them under
the " Contribution Plan," one may appreciate its
importance and value.
In the report of the Massachusetts Insurance
Department for 1868, the commissioner, Hon. John
E. Sandford, states :
" The forty-seven life-insurance companies doing
business in this State, or rather twenty-one of them,
were fortunate enough to find themselves during the
last year in possession of divisible surplus to the
amount of more than seven and one half millions of
dollars ($7,595,671.97). The whole of this magnifi-
cent fund was made up of the overpayments of in-
dividual policy-holders, or was the surplus earnings
of their money held in reserve by the companies.
They were consequently entitled to have it divided
among them by some rule or method of distribution.
The propriety of so dividing it that each policy-
holder should receive his own — the share of it which
belonged to him, neither more nor less — is too plain
to need argument or illustration.
" How, then, shall it be divided? This is not a
question of usage, of precedent, or of convenience,
but of equity and right — of right to property, to
one's own money ; and involving, as it does, millions
of dollars annually, it is a question of the first
importance.
"As a practical question, at the present time, it
resolves itself into the discussion of two essentially
different methods of distribution, which, with some
variance of detail, appear to divide the practice of
all the mutual companies. ( i ) The ' Percentage
Plan ' distributes the surplus by a uniform percen-
tage of the annual premium — assuming, apparently,
that this premium fairly represents, for the current
year, the whole capital or stock in trade of each
policy-holder in the joint concern, on which his
share of the profits or savings for the year is to be
computed. There is no other assumption on which
such a mode of distribution is intelligible. (2) The
' Contribution Plan,' rejecting the annual premium
as the measure of distribution, inquires for the
sources of the surplus — how much of it is traceable
to the surplus earnings of each one's share in the
accumulated reserve of previous years, as well as of
the current premium, and how much to each one's
share in the savings on the payments for losses and
expenses — and professes to return to each what he
or his money has actually contributed to make up the
sum total of the surplus which is to be divided. If
one of these methods is right in principle, and the
other wrong — and they cannot both be right — the
sooner it is known and admitted the better.
"We think it admits of demonstration that the
percentage plan ignores the origin of the surplus;
that its idea is radically wrong, and discordant with
the theory and methods of life-insurance ; that it
gives money which belongs to one policy-holder,
without reason or right, to another, subtracting
from the dividend to which the longer insured is
entitled, to make for the newly insured an equal
dividend to which he is not entitled ; that it does this
uniformly and inevitably, and does it on an extensive
scale. The equity of the uniform percentage plan
in dealing with the money of the insured is like the
hospitality of the famous old robber of Attica, who,
if the legs of his unwilling guests were too long for
his bed, lopped them off, and stretched them to the
requisite length if they were too short.
"The contribution plan, on the other hand,
recognizes the constant sources of surplus — a
higher rate of interest than was assumed, a lower
rate of mortality than was expected, and a less
percentage of expense than was provided for — in
establishing the premiums and reserve of the com-
ONE HUNDRED YEARS OF AMERICAN COMMERCE
pany. These sources yield a surplus which varies
with the reserve on each policy, with the age of the
insured, and with all the terms and conditions of the
insurance. The system adapts itself to the incidents
of each policy, and returns the surplus earnings from
interest, and the excess of the payments for mortality
and expenses, which belong to it. In a word, it
seeks to give to each of the insured the surplus which
his money has earned or created. It requires no
other statement than this to demonstrate its theoreti-
cal equity. The actual adaptation of the plan is
demonstrated by the fact that its formulas are de-
duced from and harmonize with the fundamental
processes of life-insurance, while no mathematics
either suggest or justify the percentage plan.
" In this country, where every improvement is
eagerly sought and usually accepted, its essential
features have received the indorsement of the most
eminent actuaries, and it has been already adopted
by a majority of the participating companies. The
statutes of this State have been amended in order
to admit of its adoption by our own companies.
Actual trial, which is the best test of its merits,
seems to have approved its equity and the practica-
bility of its use. Other companies, whose practice
has sanctioned thus far the older plan, are known to
be considering seriously its adoption. A firm belief
in its superior equity and in the general good results
to be expected from its use cannot fail to induce the
hope that this, with every other improvement that
science or experience suggests, may be ingrafted on
a system whose present success and beneficent future
are cherished and believed in with a strong and
abiding faith. Life-insurance claims an alliance
duce the system of non-forfeiture, since adopted by
all other American companies. By this concession,
policy-holders, who are unable or unwilling to con-
tinue their contracts, are guaranteed an equitable
surrender-value in paid-up insurance or in cash. The
company owes its success largely to the ability and
energy of its former president, the late William H.
Beers. Under its present able executive, the Hon.
John A. McCall, its business is growing with great
rapidity.
The Equitable Life-Assurance Society of the
United States was organized in 1859, by Mr. Henry
B. Hyde, who, although declining to be its first
president in favor of Colonel William C. Alexander,
has been the guiding spirit from its organization to
the present day. Under the superb management
of Mr. Hyde, the Equitable has surpassed its two
great rivals, the Mutual and the New York Life —
which started respectively sixteen and fourteen years
prior — in the items of income, volume of business,
and surplus. In one respect the Equitable is unique
among all large life-companies, and that is in the
fact that it has always remained under the manage-
ment of one man from its organization to the present
day. These three American offices are by far the
largest in the world. Want of space prevents men-
tion of other American life-companies by name.
The remarkable progress of life-insurance in the
United States may, perhaps, be best illustrated by
the following statistics, compiled from the reports of
the Insurance Department of Massachusetts for the
years ending December 31, 1859, and December 31,
1894. The list includes all companies which re-
ported to that department at the two dates named.
MASSACHUSETTS INSURANCE REPORTS, 1859 AND 1894.
COMMENCED
BUSINESS.
AMOUNT INSURED.
ASSETS.
PREMIUM INCOME.
SURPLUS — COMBINED EX-
PERIENCE. 4 PER CENT.
'859-
1894.
1859.
1894.
1859.
1894.
1859.
1894-
New England Mutual .
State Mutual
1844
1845
1851
1851
1843
1845
1846
1850
1849
1850
1859
$
13,041,484
2,876,591
1,787.650
4,210,380
37,235,392
22,559,"77
22,701,294
1,751-540
4,368,542
10,333,644
808,000
$
93,868,387
52,909,932
38,159,229
89,877,280
854,710,761
209,369,528
156,686,871
64,975,950
36,312,041
61,618,675
913,556,733
$
1,347,637
351,617
106,685
i83,5l6
5,840,150
2,800,717
2,528,842
187,768
582,840
670,268
107,974
$
24,252,829
9,893,072
6,430,146
15,653,367
202,494,184
55,656,860
62,229,586
11,046,572
6,592,373
13,695,656
183,138,559
$
347,717
57,429
52,565
109,387
1,032,663
649-157
709,613
46,370
167,688
308,354
15,590
$
3,079,506
1,849,884
1,455,372
3,109,360
36,123,164
7,626,152
4,677,973
2,472,702
988,582
2,056,336
36,038,931
$
533.7H
147,950
115,007
134,905
1,518,868
886,387
849,599
125,891
340,684
227,716
91,882
$
1,697,009
1,053,008
598,083
1,033,620
15,089,823
3-577.984
7,450,858
1,055,001
260,314
774.451
28,115,809
Berkshire
Massachusetts Mutual
Mutual Life, N. Y. . .
Mutual Benefit, N. J .
Connecticut Mutual .
National, Vermont . .
Manhattan, N. Y. . . .
Equitable, N. Y. . . .
with interests too high and sacred to be persistently
guilty of systematic wrong."
The New York Life- Insurance Company com-
menced business in 1845. I* was tne ^Kl to intro-
Among the early workers and fathers of American
life-insurance who are no longer living, special honor
should be given to Judge Phillips of the New Eng-
land; Guy R. Phelps of the Connecticut Mutual;
96
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Morris Robinson, Frederick S. Winston, Henry H.
Hyde, and Professor Gill of the Mutual Life ;
Joseph L. Lord of the Mutual Benefit ; William H.
Beers of the New York Life ; and last, but not least,
the late Elizur Wright, the first insurance commis-
sioner of Massachusetts.
There is one specialty in the larger American
companies which is worthy of attention, and that is
the very large amount of insurance written upon
tontine plans. Tontine assurance, as now written,
is simply an agreement by which surplus is retained
and accumulated for the exclusive benefit of those
policy-holders who survive and keep in force their
policies until the end of the tontine period agreed
upon — generally ten, fifteen, or twenty years.
Upon ordinary plans the surplus is divided an-
nually ; upon both plans the full sum insured is
always payable at death.
Life-insurance is, in effect, an arrangement or de-
vice by which the pecuniary loss to family or de-
pendents, which would result from the death of their
protector, is borne by a large number of associates,
upon each of whom the burden or loss falls but
lightly. In the case, however, of a person who dies
after paying one premium, or only a small number
of premiums, the pecuniary gain to his beneficiaries
is abnormally great, since the amount of insurance
is very large in comparison with the premiums paid
therefor. To pay dividends, in addition to the in-
surance in such cases, only aggravates the relative
inequality between persons dying early and those
who live longer and pay premiums for many years.
The tontine system, by awarding and paying sur-
such a large number of applicants prefer and select
tontine policies may be considered a proof of the
confidence of the companies and of their patrons in
the system. In the volume of business the tontine
companies surpass by far the companies which refuse
to issue that class of policies. Incidentally, it is
claimed that lapses are fewer among tontine than
among ordinary policies, and that there is a great
advantage to those who survive the tontine period
in the opportunity of closing their contracts by re-
ceiving their full equities both of reserve and surplus
in cash or in paid-up insurances, or of continuing
their policies with greatly reduced premiums.
While many companies in the United States have
failed and been wound up, those now doing an ac-
tive business are believed to be on a sound, healthy
basis. The cause of failure in almost every case
may be traced to extravagance or inexperience, but
not to excessive mortality in any instance. There
are at present, in the United States, fifty-six regular
old-line life-insurance companies, of which thirty-
two only are authorized to transact business in the
State of New York. The companies not admitted
to that State, however, are mostly small and unim-
portant. The magnitude of the business in the
thirty-two old-line companies doing business in
New York may be seen by the following statistics,
taken from the report of the Insurance Department
for the year 1894. The statistics for the British
offices (counting five dollars to one pound) were
taken from the Parliamentary Return for 1894,
published in 1895. The business of industrial
companies is omitted in both cases.
INSURANCE STATISTICS FOR 1894.
UNITKD STATES.
{32 OFFICES ONLY.)
GREAT BRITAIN.
Total insurance in force, December 31, 1894 .
$4.671;. C83.O4.6
$2,500,030,330
Total number of policies in force, December 31, 1894
I,78o, 3O7
Total income from premiums, 1894
QI, 3QI.4.IC
Total income from interest, etc., 1894
CI.4.Q2.4.34.
37,662,580
Total income from all sources, 1894
256,624,478
129,053,995
Payments for death-claims ....
78. 31 3. l62
63,874,645
Payments for commissions $29,854,751
Kxpenses of management . 13 672 918
Total . , $4.^^27,660
12,522,145
Total liabilities, December 31, 1894
Ql6 CQI 1^8
Total surplus, "
I3Q.74.O. 54.4.
Total assets, " "
I 056 331 682
I)O38,626,O35
Total number of companies reporting
32
88
plus to the latter class only, equalizes these otherwise
unavoidable and unforeseen inequalities. Moreover,
each person should be allowed full liberty in the
choice of different forms of insurance, and so-called
tontine companies issue all kinds. The fact that
In addition to the fifty-six regular old-line com-
panies, there are, in the United States, several hundred
cooperative or assessment companies, fraternal and
secret associations, in which, generally, the promise
to pay the sum insured in case of death is not def-
ONE HUNDRED YEARS OF AMERICAN COMMERCE
VI
inite and absolute, but is made contingent upon the
result of assessments to be collected from survivors.
The exact number of these organizations, with the
number of members and the total amount of insur-
ance, cannot be given, but the total insurance in
force no doubt exceeds eight and one half billion
dollars at the present time, or nearly double the
amount outstanding in all the regular life-insurance
companies.
Insurance in the old-line companies is secured,
almost invariably, through the intervention of solicit-
ing agents or canvassers, who are compensated by
commissions on the premiums collected. Men, as
a rule, will not seek life-insurance as they seek fire
or marine insurance upon their houses and merchan-
dise. They require the urgent solicitations of can-
vassing agents to persuade them to do what every
one, who has a family dependent upon his exertions,
should recognize as a duty and a privilege. In the
cooperative or assessment companies the expense of
procuring business is less, but the quality of the
insurance is inferior.
In one respect, life-insurance in the United States
differs in a remarkable degree from that in Great
Britain, and, in fact, from that in all other countries.
Each of the United States, in the absence of legis-
lation by the national government, has power to
impose restrictions, conditions, and taxes upon
corporations of every other State seeking to do
business within its precincts. Each State has its
own Insurance Department and its own statutes reg-
ulating life-insurance. In consequence, the policy-
holders of life-insurance companies are subjected to
great hazard, inconvenience, and expense by reason
of diverse and oftentimes incongruous legislation.
The burden imposed upon the management of our
life-insurance companies by reason of the require-
ments of the different States, and of the necessity
laid upon them to protect the interests of the policy-
holders by guarding them against unfavorable and
unwise legislation, is very serious.
In striking contrast with the American system of
State supervision by legislative enactments is the
system adopted in Great Britain. There the com-
panies are required simply to file with the Board of
Trade sworn statements as to the amount of assets,
of income, and of liabilities, giving the table upon
which such liabilities are computed ; and the public
is left to find out their relative merits or standing by
such illumination as active competition and public
information may bestow. No attempt at super-
vision of companies is made, and in Great Britain
no tax is laid upon life-insurance. It is there as-
sumed, and very justly, that life-insurance is a pub-
lic benefaction ; that it tends to promote thrift and
economy on the part of its citizens, and to avoid
the burden of paupers upon the state, and as such
should be fostered and encouraged by every proper
means.
In other words, life-insurance in the United States
is the subject of supervision and tax by our legisla-
tive Solons, while in Great Britain publicity and
natural competition are relied upon to keep the
companies in sound condition. The two methods
are in sharp contrast. It cannot be denied that the
American system has one advantage in the complete
published returns, even to the minutest detail, of the
items of assets, liabilities, and methods of business,
which are open to the inspection of the public.
American companies are thus enabled to dispel
honest doubts and disarm designing criticism by
the simple logic of facts, and to demonstrate be-
yond question their claims to the confidence of the
community.
&?uj^a«s(h^r*t*^#*4^&
CHAPTER XVI
AMERICAN RAILROADS
DYNAMICS has never produced a greater
power than the locomotive engine. Stephen-
son's Rocket drew in its train results more
momentous in their relation to human destiny than
any motive force the world has ever known. To-
day, railroads, their achievements and their prob-
lems, are of vaster importance than any other one
factor in economic affairs. Evolved from the dis-
coveries that found steam a force and harnessed it,
through the means of applied mechanics, their de-
velopment has produced those marvelous feats of
constructive and engineering skill which distinguish
both them and the age alike. Their extension has
blazed the path of progress, and as they have built
up, so have they bound, the new sections to the old,
until beneath their network has broadened homo-
geneously the greatest nation on the face of the
earth.
Transportation, whether of the person or of prop-
erty, with ease, speed, and safety is the first and
most self-evident of the achievements of the rail-
road. In the administration and regulation of this
function questions have arisen, legislation been
framed, and experiments made during nearly thirty
years, but with small beneficent result. In the mists
of the discussion thus raised the " railroad problem "
has ever loomed larger and more distorted than it
should appear. Primarily the railroad is based upon
certain broad and immutable principles underlying
the commercial and industrial system, as an integral
part of which its dependence should be at once ap-
parent. That such has not been universally recog-
nized is due to two causes : first, few people except
those whose interests and prejudices have moved
them strongly either to one side or the other have
ever investigated the matter to its ultimate conclu-
sions ; second, the railroad system itself, in the strong
throes of its formative period, has sometimes seemed
to deny its manifest destiny. Unrestrained and
ruinous competition, reacting upon itself, has forced
98
rate wars and discriminations, confined to no one
locality or territory, but threatening even such results
as the diversion of the nation's commerce. That
this period, now approaching its end, should give
way to better conditions and wiser policies is as in-
evitable as that iron rails should give place to steel.
Potent as the railroad is, it must conform to rather
than make conditions. The New York merchant
will trade with Chicago if transportation rates leave
him a profit ; if they do not, his business with
Chicago ceases, and the carrier loses. From this it
follows that, within the limits of a just and reason-
able freight tariff, the equalizing laws of trade must
determine conditions for the railroad. With this
elementary principle in mind, the " railroad prob-
lem " loses many of its difficulties ; but it is not the
purpose of this article to discuss this question further,
except as its effects are seen in tracing the history
of the system's development.
The first railroad commonly claimed to have been
built in America was in Massachusetts, and ran
from the Quincy granite quarries to tide-water at
Neponset, a distance of three miles. It was com-
pleted in 1826, at a cost of $34,000. Candor com-
pels the statement that this much-vaunted bit of
road was neither more nor less than an ordinary
tramway for horse-power, such as had been common
at the English coal-mines for many years before that
time. Waiving, then, the claims of the Quincy
road, as well as those of the Mauch Chunk switch-
back road, built in 1827, the record shows the first
railroad in this country really entitled to be called
such, and the first on which a locomotive was actu-
ally run, to have been the Carbondale Railroad,
built in 1828, by the Delaware and Hudson Canal
Company, from their coal-mines to Honesdale, Pa.,
a distance of sixteen miles. In 1829 a locomotive
built in England from the plans of Horatio Allen,
an American engineer, was brought over, and in
August commenced running regularly on this road.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
1'hat locomotive, called the Stourbridge Lion, was
the first ever used in the United States, and was
imperfect even for those times. The multitubular-
boiler engines which succeeded this type were per-
fected by Stephenson, and the Rocket, the first of
this new class, was successfully tested over the Rain-
hill track in the same year.
The Rocket was to the railroad what the Clermont
was to steam-navigation, and to its inventor, as to
Fulton, should be accorded the full measure of glory
for the achievement. At the same time, in this case
again, as in that of Fulton, the idea thus perfected
and demonstrated practicable was not a new one.
Little known as the fact is generally, an American
was the first to conceive the locomotive engine.
His name was Oliver Evans, and in Philadelphia
he perfected in 1782 a steam-carriage, consisting of
a high-pressure engine placed on wheels. This
machine, when exhibited during that year, was
found capable of running a mile and a half at a
single stretch. From this time the records show no
further attempts in this direction for twenty years,
or until 1802, when Richard Trevethick, an English-
man, patented a self-acting steam-engine, capable
of drawing a light load at the rate of five miles an
hour. Two years later this engine was put in use
at the Merthyr-Tydvil mines ; and the demonstration
in 1811, by Mr. Blackett, an English coal propri-
etor, that weight and friction would suffice, even
with smooth wheels and rails, to render the steam-
engine self-motive on grades or with heavy loads,
caused the further introduction of short lines at the
mines. The final triumph in locomotive engineer-
ing, and the one which made possible a speed and
draft-power of practical utility, was reserved for
George Stephenson, the rough and unlettered North-
umbrian miner. Passing over his earlier struggles
and partially successful models, we find the Rocket,
in 1829, standing boldly forth as the alpha of the
modern railroad.
The first American locomotive did not appear for
nearly a year later, and was but a diminutive affair.
It was called the Tom Thumb, and its inventor was
no less distinguished a personage than the late Peter
Cooper. The boiler of the Tom Thumb, although
little larger than that of an ordinary kitchen range,
was provided with vertical tubes, thus securing the
necessary heating surface ; but the waste-steam blast
of Stephenson was replaced by a primitive bellows-
like contrivance worked by a drum, with a belt
which passed over one of the wheels of the carriage.
Notwithstanding its crudity, this little locomotive,
which was run by its inventor over the tracks of
the Baltimore and Ohio,— then operated by horse-
power,—was capable of a very fair speed.
Mr. Cooper's retirement as a locomotive engineer
came about too speedily, however, for his genius in
that line to be thoroughly tested. It was due to an
amusing circumstance, which caused the late ven-
erable philanthropist much mortification for many
years. While out with a party of friends exhibiting
the Tom Thumb, Mr. Cooper met, at a spot where
the road and railroad tracks paralleled each other,
the proprietor of the great stage-coach line of that
part of the country. This gentleman, who was
waiting with one of his fleetest trotters, proceeded
to demonstrate the superiority of horse-flesh over
steam. He would scarcely have been able to do
this but for a mishap, as Mr. Cooper fired up his
tiny furnace and ran steam far above license limits,
while the diminutive Tom Thumb trundled along at
a rate that after the first quarter was placing steam-
power well in the lead. Slowly the engineer-fire-
man-inventor saw his engine drawing away from
the wearied horse, and victory seemed certain, when
suddenly the belt, before mentioned, ran off the
drum, the fires slackened, and the race was lost.
Mr. Cooper felt his defeat keenly.
The second American locomotive was built at the
West Point Foundry near Cold Spring, N. Y. (where
the Parrott guns were cast during the War of the
Rebellion), after plans by E. L. Miller, and was
equipped with a common vertical boiler. Despite
this drawback, this locomotive, which was called
the Best Friend, did attain, unattached, a speed of
thirty to thirty-five miles an hour, and with a train
of five cars fifteen to twenty miles. This locomo-
tive was built for the South Carolina Railroad, which
ran between Charleston and Hamburg, and with the
consideration of which is fairly begun the history of
American railroads.
On the fifteenth day of January, 1831, or precisely
four months after that memorable day when George
Stephenson, standing on the foot-board of the
Northumbrian, had started the first train, on board
of which was the Duke of Wellington, over the
Manchester and Liverpool Railroad, the stockhold-
ers of the South Carolina Railroad celebrated the
first anniversary of the opening of their road by
introducing steam motive power. The Best Friend
was the locomotive, and by means of it a train of
two pleasure-cars, carrying a band and 150 stock-
holders, together with a specially fitted up carriage
bearing a detachment of United States troops and
a field-piece, went down the road on a grand excur-
sion. This was the inauguration of the passenger
100
ONE HUNDRED YEARS OF AMERICAN COMMERCE
railroad system of the country, and it followed very
closely, as can be seen, upon the English beginning
made by the Stockton and Darlington road in 1825.
The fact that the road was a year old before steam
was introduced illustrates a point which every stu-
dent of American railroads has had brought to his
attention and consideration, viz., that America, as
though foreseeing the final triumph of the locomo-
tive, commenced her railroads some time before this
motive power was developed. As an example of
splendid assurance, the action of this same South
Carolina Railroad in voting, on January 14, 1830,
that " steam " should be the only motive power used
on the road stands unequaled. Other roads were
similarly forehanded in laying their tracks in antici-
pation of the locomotive. The Baltimore and Ohio,
begun in 1828, was operating by horse-power a short
stretch of road fifteen miles long, from Baltimore to
Ellicott's Mills, in 1829, and carried as many as
80,000 passengers and 6000 tons of freight during
the year 1831. A year later, when the line had
been extended to Frederick, steam was introduced
as the motive power. In 1831 the South Carolina
Railroad had progressed to a point where it origi-
nated the four-wheel car-truck, and had replaced the
primitive old Best Friend — which had unfortunately
suffered from a boiler explosion early in its career —
by locomotives of more improved construction and
design. In connection with the apprehension caused
by the bursting boiler a curious custom developed
on this road. This was the introduction of a car
loaded with several bales of cotton, and known as
the "barrier car," between the locomotive and the
passenger-cars. Behind this the early Carolina
traveler felt comparatively safe.
Among others of the very early roads were the
Baltimore and Susquehanna, dating from 1 830 ; the
little four-and-a-half-mile line between New Orleans
and Lake Pontchartrain, starting the same year ; the
Boston and Lowell, incorporated in 1830; the Bos-
ton and Providence, and Boston and Worcester, in-
corporated in 1831 ; and the Mohawk and Hudson,
which commenced running in September, 1831.
Of all the early roads this latter is probably the best
known, through the numerous old prints that have
been preserved of the De Witt Clinton puffing along,
with a train of most extraordinary cars in the rear.
These were nothing more or less than ordinary
stage-coach bodies mounted on trucks, coupled to-
gether with chains. The track consisted almost
universally of wooden rails, laid upon stone or tim-
ber ties, and having an iron bar or " strap," of from
one half to five eighths of an inch in thickness,
spiked along the top on its inner edge, on which the
wheels ran. The early American locomotive engine,
of which the De Witt Clinton may fairly be said to
be typical, was a small, rather rickety affair, weigh-
ing from three to three and one half tons, with a
detached tender carrying pitch-pine for fuel, and
capable, when driven, of making thirty miles an
hour. The spark-arrester for smoke-stacks was un-
known, and outside passengers escaped lightly if
their clothing caught fire no oftener than once or
twice during a trip.
The English locomotives built by George and
Robert Stephenson at Newcastle-on-Tyne were
heavier and better machines. The first of these,
brought here before the Rocket model had been
perfected, was landed at New York in 1829, and
set up in an iron-yard on the East River, where it
was exhibited as one of the mechanical marvels of
the time. This engine, however, was little, if any,
better than the home-made ones ; but in 1 83 1 there
was imported another of the improved models,
which weighed seven tons, and was considered a
most powerful machine. This engine was for the
Mohawk and Hudson road, and cost when deliv-
ered, with all charges paid, $4869.59. Its general
appearance and effectiveness will be easily imagined
by those who saw at the World's Fair at Chicago
the famous old Johnny Bull, of the Camden and
Amboy line, of historic memory. This engine, a
great machine in its day, was landed at Philadelphia
in August, 1831.
Almost the first improvement made by American
engineers upon the English models was the intro-
duction of the swivel fore-end truck, suggested in
1831 by Horatio Allen, of the South Carolina Rail-
road, but first perfected and adopted by John B.
Jervis on the Mohawk and Hudson road, in the
same year. This change, so absolutely necessary in
a country where railroad companies had neither
money nor time to spend in avoiding heavy gradi-
ents and sharp curves, gave the American machines
an advantage over the rigid English locomotive
which they have ever since maintained. Even to-
day a billiard-table road-bed is essential in obtaining
good results from machines of English make. The
equalizing-lever, patented by Joseph Harrison, Jr.,
of Philadelphia, was the second improvement, and
was absolutely demanded by the rough-and-ready
nature of the work required on American railroads.
It gave greatly increased stability, and lessened to a
large extent the danger of derailment. The idea of
two pairs of driving-wheels was patented in 1 836 by
Henry R. Campbell.
ONE HUNDRED YEARS OF AMERICAN COMMERCK
101
The railroads of the country were growing, mean-
while, and those already mentioned and a few others
were either undertaken or in view within twelve
months of the day that the Best Friend pulled the
first passenger-train out of the Line Street station in
Charleston. In 1830 there were but 23 miles of
railroad in operation in the United States. Within
a year this had been increased to 95, and a year
later still to 229 — a wonderful record, considering
the undeveloped resources of the country at that
time. It cannot be claimed that these railroads
were such as to compare even distantly with those
in England. They were but primitive constructions
at the best, cheaply built, poorly equipped, faultily
designed, and, briefly, such only as a young country
commanding the crudest of mechanical appliances
could produce. Then, as in later times, it was the
practice of railroad managers to construct their lines
as quickly and as cheaply as possible, leaving their
improvement to the future, when its necessity should
have been demonstrated, and the expense could be
borne by the earnings and surplus funds. This pol-
icy, avoiding enormous initial outlay, is still working
itself out, as has been seen so plainly of late years
in the gigantic undertakings by which the Pennsyl-
vania road is straightening its crooked course, and
the New York, New Haven, and Hartford is obvi-
ating highway crossings at grade. In England, on
the contrary, construction has always proceeded
upon a different plan. Heedless of obstacles, re-
gardless of expense, and careless of time, engineers
have gone slowly forward. Had Edinburgh and
London been as far apart as New York and San
Francisco, they might not yet have had a rail con-
nection. The Manchester and Liverpool, the second
English railroad opened, well illustrates this. It
approached very nearly to those attainments of
engineering skill which characterize construction to-
day. George Stephenson, who had invented the
locomotive, also carried out the building of its path-
way ; and in this road, with its underground tunnel,
high embankments, deep cuttings, lofty viaduct, and
buoyed road-bed across the quaking bogs of Chat-
moss, he achieved a distinction as an engineer that
was second only to the greater glory of his mechan-
ical inventions.
America, slow though she necessarily was at first
in developing the resources which were essential to
perfect railroad construction and equipment, was
behind no nation in her realization of the economic
value of this new method of transportation. Her
initial crudity, even if the circumstances of the time
did not sufficiently excuse it, may perhaps be par-
doned when it is considered what sacrifices the pro-
prietors have made in later years in order to overtake
and outstrip every other nation on the face of the
earth. The American railway system stands forth
to-day as the most stupendous and progressive, and
among the most perfect, in the world. But this is
outrunning history. Sixty-five years ago, the great
mass of the people never dreamed, wonderful as they
believed the railroad to be, of the extended achieve-
ments of to-day. Only by a few men of great
minds was the true significance of this new factor in
affairs properly appreciated. Long after the excite-
ment and novelty attending the opening of a new
road or the trial of a new locomotive had worn off
through the very frequency of its occurrence, they
were planning and working toward great ends.
They saw that the canal system must give way be-
fore the new force as soon as the public needs
demanded that speed and convenience should
replace the old-time delays and discomforts. With
it all, the men who had made New York the great
commercial center of the country, and who, down
the long Erie Canal and the broad waterway of the
Hudson, had led to their city the produce of the
great central and lake region, then known as the
West, saw their commercial supremacy menaced.
Nor did they realize the danger more quickly than
did the enterprising spirits of the other great rival
seaports — Boston, Philadelphia, and Baltimore —
recognize their opportunities. The Erie Canal,
striking to the very heart of the continent on the
line of least elevation above tide-water, had settled
the question, until then contested, as to which of the
great Eastern cities should become the national port
of entry and distributing center. Away down in
New Orleans, reaching up with the long arm of the
Mississippi, as well as in all the Atlantic seaports,
had been felt the diversion of the stream of Western
trade ; and it was, in fact, the effort to recover this
lost ground that caused one of the earliest of the
railroads, the great trunk-line of the Baltimore and
Ohio, to be projected. Between Baltimore and her
hopes, however, stretched the rough barrier of the
Alleghanies, and the engineering skill of those days
was scarcely sufficient to compass all at once this
difficulty. Philadelphia, too, actuated by the same
motive and attempting reprisal by the same means,
found herself balked by the same great wall. Still,
these delays were recognized as being only tempo-
rary, and already, by 1835, Boston was seen to be
reaching out over the Boston and Worcester to cross
the previously supposed insuperable barrier of the
Berkshire Hills and enter Albany. This, we know,
102
ONE HUNDRED YEARS OF AMERICAN COMMERCE
was accomplished in 1841 ; but long before that
time, in 1836, the great trunk-line of the Erie Rail-
way was commenced, and the foundation laid for
New York's greatness as a railroad center. The
completion of this road to Dunkirk in 1851, and its
opening for through traffic, marks the inauguration
of the trunk-line system.
Another great railroad power, active during all
the earlier period in behalf of New York, was the
New York Central, which was formed in 1853 by
the consolidation of five small railways. This shows
how, before its future great president, Commodore
Vanderbilt, entered on his successful career as a
manager, others appreciated the axiom that compe-
tition among railroads cannot exist where combina-
tion is possible. Commodore Vanderbilt was, how-
ever, well known before that as an important factor
in the business of conducting transportation. In
the very earliest days of railroads, when the Boston
and Providence, in 1835, established the first link in
the rail connection between New York and Boston,
his steamboats afforded the complementary trans-
portation. It would be far too tedious, and require
too great a space, to trace in detail the fortunes of
the American railroads through the disconnected
links of short lines which began in 1831 to spring
up all over the country. As an evidence of the
number and comparative insignificance of these
roads, it can be stated that in 1832, when the total
mileage of the country was only 229, there were no
less than sixty-seven separate railroad companies in
the State of Pennsylvania alone. In this multiplic-
ity of beginnings a general idea of the growth of
the railroads of the United States can best be derived
from the following figures, which give the total mile-
age of the country by demi-decades from 1830 :
MILES OF RAILROAD IN OPERATION FROM
1830 TO 1894.
YEAR.
1830
1840
1845
1850
1855
1865
1870
1875
1886
I885
MILES IN
OPERATION.
23
1,098
2,818
4.633
9,021
'8,374
30,626
52,922
74,096
93.296
128,361
,
"890 .................................... 166,706
9' ................................ -• ..... 170,795
..................................... 174,750
'°93 ...................................... 170,607
l894 ...................................... I7544I
Omitting for the present the consideration of the
later figures, the proportionate importance of the
early increase as expressed in percentages is seen
at once. From 1835, when the first 1000 miles of
railroad were in operation, the increase for each
established period of five years varies but little from
one hundred per cent, until the time of the Civil War.
With the railroads of the country thus doubling twice
in every ten years, it is easy to understand that condi-
tions must have been more or less chaotic so far as
rates and facilities were concerned. Towns reached
only by a long, tiresome, and expensive wagon-ride
one year were placed in close communication with
the outside world the next. The communication
naturally established trade relations ; a new market
and a new source of supply were concurrently
developed, and the effect could not be anything
but stimulating to the industrial condition of the
country.
There was much unevenness in this early develop-
ment, however, and much inequality ; not only was
one town favored at the expense of another, but
even the favored ones found themselves confined
within the limits of a system that was ignorant of
coterminous facilities, and jealous to an extreme
degree of joint traffic. In such conditions, there-
fore, it was some time before the many links began
to realize that they were but part of what must
eventually be a great chain. It was not until so
late as 1860 that the railroad chain was complete
and continuous along the Atlantic coast and to the
South, and that Bangor, Me., and New Orleans
were at last at the ends of a connecting system.
In the West, prior to 1850, there were, broadly
speaking, no railroads. The first ones to be built
on the farther side of the Alleghanies were, singu-
larly enough, in the extreme Southern States of
Louisiana and Mississippi. These roads were the
Clinton and Port Hudson, incorporated in 1833,
and the Bayou Sara and Woodville road, incorpo-
rated as the West Feliciana Railroad Company in
1831. They were operating before 1840, and have
continued ever since, enjoying the distinction of
being the pioneer Western railroads. For ten years
thereafter no new ones entered the field, but by the
middle of the next decade a network of them was
stretching across the face of the great central region.
A system of land grants did much to foster this
growth in the West. The general government
allotted certain alternate sections of the public lands
to the several States in the West, and these States
ceded them under certain conditions, in the nature
of a subsidy, to the railroads. The Illinois Central
and the Mobile and Ohio were the first railroad
corporations to gain the advantage of these grants.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
It was during this period that the far-reaching
effects of the railroads began to be appreciated in
the fuller significance to which their extension has
brought them to-day.
The intervention of the five years of war and
turmoil which came coincidently with this realization
prevented the immediate carrying out of the plans
then formed. Nevertheless men were planning all
through that dark and disturbed time, laying the
foundations of those gigantic undertakings the be-
ginnings of which were made almost before the
dawn of peace at Appomattox was saddened by the
death of Lincoln. By 1866 the spirit of railroad
extension was spinning the shining network of its
rails throughout the land; by 1869 it reached
dimensions wonderful to behold, 8000 miles in each
of the two succeeding years being the rate of in-
crease. Profits satisfying the grasping hopes of
avarice beckoned capital on, and, with small regard
for consequences to themselves, the railroad man-
agers plunged recklessly into competition. Existing
lines were paralleled ; territories already covered by
one system were invaded by rivals, and the great
war of competition began in earnest.
This weakness of unlimited competition, coupled
with the extreme sensitiveness of the railroad to
industrial and commercial changes, found it more
than vulnerable when the crash of 1873 came upon
the country. In view of the disastrous consequences
of the failure of Jay Cooke & Company, in the
troubles of that time, the railroad may fairly be said
to have aided in bringing about its own decline,
since it was in attempting to carry singly the enor-
mous financial burden of the Northern Pacific con-
struction that this great house went under. Within
the next two years railroad increase dropped off
seventy-five per cent. Then, responding to improved
conditions, it started again on the wonderful career
which ended early in the eighties, when enterprise,
having overdone itself in such follies as the Nickel
Plate and the West Shore bubbles, fell from sheer ex-
haustion. Recovering therefrom within the short
space of three years, a fresh start was taken, at a
pace that placed the record for annual railroad
extension at nearly 13,000 miles. This was between
1886 and 1887, and was followed by a normal
growth lasting until the financial troubles and indus-
trial depression of 1893, when for the first time in
the history of railroads in the United States the
number of miles of road operated decreased. The
discussion of this phase of the subject, bringing us
as it does to the present time, will properly come
later. Reverting, then, to the period immediately
103
following 1869, extending, with the brief interrup-
tion already noted, to 1883, we find an idea of the
pace at which the great systems of the country were
evolving in the figures for the single decade between
1869 and 1879.
INCREASE OF SELECTED SYSTEMS, 1869 TO 1879.
NAME or ROAD.
MILEAGE
.869.
MILEAGE,
1879.
Pennsylvania R. R. . . .
c?8
N. Y. Central and H. R. R. .
53°
4,000
Chicago and Northwestern
Chicago, Milwaukee, and St. Paul . . .
>yj
1,150
839
2,158
2,250
This increase is not, of course, to be set down
wholly to structural extension, which was in fact
but one factor in the growth, and scarcely more
important than several others. Consolidation, or
acquirement by lease or purchase, has much to do
with the formation of great lines. This policy was
undoubtedly based in its conception upon the falla-
cious idea, generally held by railroad managers at
that time, that it was possible for a road, by exclu-
sive control of territories, to obtain advantages in
the dictation of rates and facilities that would enable
it to maintain itself upon the arbitrary basis of
charging " all that the traffic will bear." Under-
taken in this spirit, however, the great systems,
coming to understand more fully the limitations of
their power, have applied themselves to the problem
as it actually exists, and in the constantly decreasing
rates of transportation, made possible by the econo-
mies of concentration and latter-day improvements,
they have given that stimulation to trade which is
at once the encouragement of the merchant and the
advantage of the carrier. To illustrate the growth
that has resulted, the increased mileage of the fol-
lowing large systems in the period from 1883 to
1894 is given:
GROWTH OF SELECTED SYSTEMS, 1883 TO 1894.
NAME op ROAD.
MILEAGE,
1883.
MILEAGE,
1894.
Atchison, Topeka, and Santa F6
Baltimore and Ohio
2,510
I SCA
9.345
Central Pacific
ZjyO/
I -12X
Chicago, Burlington, and Quincy ....
Chicago, Rock Island, and Pacific
Illinois Central
3.322
1,38"
I Q27
5.73°
3-572
Lake Shore and Michigan Southern . .
New York, Lake Erie, and Western .
Northern Pacific
1.339
1,025
U4B
1476
2,001
4.4C7
Southern Pacific
ooo
6,1"
Union Pacific.
1,820
4.46Q
104
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Sketching thus in outline the history of the rail-
roads down to recent times, one branch of the sub-
ject has been omitted until the last in order that its
importance might have the full consideration that it
deserves. This is the transcontinental system. Its
conception, its accomplishment, and its development
are the glory of American genius, and its union of
the most distant bounds of this great nation the
bond which makes one in material fact a nation
that must ever be one in sentiment and purpose.
So early as April i, 1850, there met at Philadelphia
a convention called to discuss the feasibility of a
railroad to the Pacific coast. The discovery of the
California gold-fields, and the rush thither in the
years preceding, had turned men's minds as they
had never been turned before toward that wonder-
ful country so lately won from Mexico by the
aggressive patriotism of Commodore Shubrick.
From a little-known region where traders bartered
for hides with the indolent and suspicious Mexicans,
California had become the El Dorado where hun-
dreds of thousands longed to go, and thousands
already there clamored for the supplies the East
would so willingly have furnished them. But there
were no means of getting there except by the long
sea-voyage, either crossing the Isthmus or around
Cape Horn, or by the equally slow and far more
perilous voyage in the prairie-schooner across the
plains and mountains, where hostile Indians, starva-
tion, thirst, — every danger, in short, that an unknown
and arid land could offer, — awaited the traveler.
Could a railroad but be built, these gentlemen who
gathered at Philadelphia in 1850 felt how great
would be its achievement and how instant its suc-
cess. They were ahead of their time, however, and
the project was too vast for immediate acceptance.
Man had not then become accustomed to working
miracles, as he has in these days, when no project
is too immense or chimerical to have its stock sub-
scribed for at some figure. Accordingly nothing
was done beyond the mere exploiting of a great
idea ; but perhaps that was the best thing that could
have been done, inasmuch as it familiarized men's
minds to the contemplation of the thing as possible.
The second great step in the preliminary endeavors
toward transcontinental railways was made during
the administration of President Pierce. The War
Department, at whose head was Jefferson Davis,
organized and carried out a great survey, laying out
several railroad routes across the continent. The
report of these governmental engineers still further
interested the country in the subject.
The idea first enunciated in 1850 was twenty
years in coming to its full fruition. The conditions
caused by the war, and the necessity, more strongly
felt than ever, for close communication with the
great Western regions and the Pacific slope, were
powerful motive forces in the direction of such an
undertaking. California had built her first railroad
in 1856, and was as eager to reach the Atlantic as
the Eastern States were to arrive at the Golden
Gate. With a united sentiment in its favor, and a
government ready to aid by every means in its
power, the stupendous project was inaugurated on
July i, 1862, by the incorporation by Congress of
the Union Pacific, which in its junction, seven years
later, with the Central Pacific near Ogden, Utah,
completed the first railroad line across this or any
continent. The government, as its share in the
undertaking, granted subsidies of enormous value.
To the Union Pacific — the main line of which ran
from Omaha, a straggling frontier town, to Ogden,
Utah, a distance of 1033 miles — was granted a sub-
sidy in bonds of $16,000 per mile from the Missis-
sippi River to the base of the Rockies. Across this
almost impassable barrier the amount was raised to
$48,000 per mile, and between there and the Sierras
lowered again to $32,000 per mile. In all, 1038
miles were subsidized, at an expense to the govern-
ment in bonded indebtedness of $27,236,512. In
addition to this the company was granted, subject
to securing patent, no less than 12,000,000 acres of
land.
The Central Pacific, in its turn, with a subsidized
mileage of 737, cost the government in bonds issued
$25,885,120, and received land grants amounting to
90,000,000 acres. The first rail on the Union
Pacific was laid in July, 1865, and between then
and May 15, 1869, when the junction with the
Central Pacific was finally made, the work was car-
ried on amid difficulties such as can scarcely be
understood to-day. Surveying parties, cut off by
Indians, perished miserably; construction camps
harassed, stock driven off, stragglers cut down
almost within hearing of the clicking picks and strik-
ing shovels ; constant alarms and wearying watch-
fulness— all these things made up the price which
the white man paid the Indian for passage across
his lands. Nor were these the only difficulties.
Nature herself opposed her most formidable front
to the invaders of her solitudes — deserts parched and
alkaline, rivers rock-walled and turbulent, valleys to
be crossed, hills to be cut down, mountains to be
wound about in snake-like, tortuous curves. Now
clinging to the side of a sheer precipice, now span-
ning a fathomless chasm, now diving beneath some
STUYVESANT FISH.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
109
huge spur barring the way across the everlasting
heights, slowly the twin threads of steel crept on.
Men who had shriveled with fever on the sun-baked
levels shivered with the deadly cold on the cloud-girt
heights, and hundreds fell. But the Rockies were
crossed at last; to an altitude of 8205 feet above
sea-level the long roadway climbed, falling thence
slowly to the plateau beyond. It was the greatest
engineering feat man had ever achieved, and marks
an epoch in the progress which there began to
stretch beyond the accepted bounds of human lim-
itation. The Central Pacific crossed the Sierras in
a similar manner at an altitude of 7042 feet, and
dragged for hundreds of miles through the Hum-
boldt Desert, and the work was done. There is no
need to enlarge upon the importance of what is self-
evident. The correlation of Occidental development
and Eastern prosperity is too well understood to
require demonstration, and even if it were not, the
results which the brief quarter of a century of trans-
continental communication has effected speak far
beyond the power of either words or figures.
Others of the early transcontinental lines speedily
followed on the commencement just related. Long
before the first through train from East to West was
run, new companies had been chartered, and long
construction trains, laying their roads before them as
they went, were crawling across the continent. The
Northern Pacific, chartered in 1864, was organized to
construct a line from Lake Superior to Puget Sound,
a distance of 1800 miles, with a branch 200 miles
in length to Portland, Ore. The land grants ob-
tained by this company aggregated 47,000,000 acres.
The Atlantic and Pacific Railroad, chartered in
1866, obtained grants of land based on mileage;
12,800 acres being allowed per mile in the States,
and 25,600 acres per mile in the Territories. This
line in connection with the Atchison, Topeka, and
Santa F6, and the St. Louis and San Francisco
Railway, made practically two routes across the
continent. The Texas Pacific, which was incorpo-
rated in 1871 to extend from New Orleans to Sierra
Blanca, a distance of 1068 miles, joined there the
Southern Pacific, which ran to San Francisco, and
the rail connection was opened on October 15,
1882, thus perfecting the union of the Pacific coast
with the country at large, and more fully binding it
in the following year by the further junction of the
Southern Pacific with the Galveston, Harrisburg,
and San Antonio road to the Gulf.
It would be impossible to trace further, even if
space allowed, the progress in detail of that most
complicated organism, the American railroad system,
toward its present condition. By just what steps
the advance, undeniably making toward homogene-
ity and a concentration of control, is to be brought
about is a question hard to answer, and admitting
of explanation based on varying opinions. It is
unquestionable that this potent force steadily work-
ing is the one in which the final solution of the so-
called " railroad problem " will be found. It is a
power best observed in the results following its
manifestations as railroad history knows them, and
therefore best studied in the abstract rather than in
the detailed enumeration of the absorption by the
XX line of the YZ road, and so on through all the
permutations of railroad evolution.
The constructive period of the railroad in the
United States may be said to have ended in 1869,
assuming our definition of this period as that during
which extension was purely on legitimate lines, with
new fields for all, and non-competing roads the rule.
This period, being naturally one of great prosperity
for existing lines, became through this very reason
the cause of their own undoing. It showed men
where money was to be made, and regardless of the
fact that where one man may live in plenty two
men may find but scanty rations, and four men
starve, they rushed into the new field. Thus was
inaugurated, almost imperceptibly at first, but more
and more impetuously as it went on, the era of un-
checked competition, through which it seems to have
been necessary that the railroads should pass. The
very swiftness with which it came on only aggra-
vated the distemper. Industrial and commercial
conditions found it impossible to keep up with the
facilities that the railroads were offering. Manufac-
tories were only producing such an amount as trade
demanded, and trade, in its turn, was only of such
volume as consumption, regulated by existing con-
ditions, required. In the handling of this internal
commerce, transportation facilities as they then
existed sufficed.
Into this seemingly well-balanced order was sud-
denly injected the new element of vastly increased
transportation capacities. Competitors built rival
roads side by side with the old ones, and tapped
from opposing sides the tributary territories. Then,
that they might secure business, rates were lowered
and the war fairly begun. Where one railroad had
been able to handle the traffic of a given section,
two now divided between them the same traffic.
Commerce could not double itself at a bound; it
had to grow. Furthermore, it saw its advantage in
this struggle of the railroads, and so in turn crowded
each of the competitors to a fresh concession, which
100
ONE HUNDRED YEARS OF AMERICAN COMMERCE
was at once used as the lever to screw down again
the rival. This state of affairs could not last, and
its effects were soon seen in the bankrupt roads that
began to appear. These only brought a fresh com-
plication to a condition of affairs that was fast be-
coming alarming to the longer heads who were
managing the great lines. Thus was demonstrated
the fallacy that competition, free and untrammeled,
could work no evil. With nothing in their treasuries
and profit earning impossible, the only resource of
the bankrupt roads was to secure business at any
price in order to live, and they did it, and kept on,
while the solvent lines became poorer.
From such a state of affairs there was but one
issue — natural, but distasteful to a degree to men
who were jealous of their company's exclusive sov-
ereignty, even to the extent of refusing joint traffic.
This issue was combination, and the lukewarm
manner of its early adoption made it but a poor
remedy. Furthermore, the public, ever ready to
view with alarm the harmony of great interests, saw
in this only a gigantic scheme of the railroads to
monopolize power. The very men and communi-
ties who had thrived by the discriminations forced
by a fierce competition were loudest in protesting
when a more equitable adjustment was proposed.
Towns fifty miles apart and connected by two or
more roads could exchange their goods at a less rate
of freight than was paid by the shipper in the small
half-way town who had only one road to depend
upon. By such a system as this the railroad man-
agers sought compensation for the slaughter of rates,
and the secretly favored shippers acquiesced silently.
From those who paid full rates in the less favored
towns, however, there was no such approbation.
They were undoubtedly discriminated against, and
instead of recognizing that it was the inevitable
result of that competition so universally applauded,
they regarded it as the deliberate persecution of
great corporate interests.
In the West this feeling was most intense, and the
Granger movement, which began in Illinois in 1870,
and attained the dimensions of a political power
three years later, attests its violence. Of the legis-
lation growing out of this agitation in the West there
is little need to speak. The railroad commissions,
as at first there organized, were too extreme in
their partisanship to exert great remedial influence.
Drastic laws enacted by the legislatures, scaling
arbitrarily all rates to the basis of the competitive
rate, nearly ruined the railroads. Taxes, wages, and
fixed charges had to be met, and rates on that basis
could not accomplish it. Capital became frightened
and withdrew, and development in those sections
was arrested to such an extent that even the legisla-
tures themselves became alarmed, and where the
Granger movement had flamed the fiercest it died
the soonest, and within three or four years less
arbitrary laws were passed, and the commissions
became less bitter in their antagonism.
Early commissions in the East were more fortu-
nate, owing to the fact that the resident ownership of
railway stocks and bonds made their spirit more
temperate and their powers less arbitrary. Of this
early appearance of the State regulation of railroads,
afterward developed in 1 886 to national proportions,
the scope of this article prevents extended mention,
the subject falling more strictly within the lines of
the chapter on " Interstate Commerce."
Adhering, then, to the original lines of railroad
discussion, we come in 1873 to that epoch-mark-
ing event, the Saratoga Conference. Competition
was verging on chaos. The solvent lines, having
competed until combination had been forced as the
alternative of ruin, now sought to present a united
front to the bankrupt and reckless roads, whose
motto was " business at any price." The five great
trunk-lines connecting the Eastern seaboard with
the interior were the Baltimore and Ohio, the Penn-
sylvania, the Erie, and the New York Central, and
north of all these the Grand Trunk, a Canadian line.
Agents from the first four of these lines had from
time to time met at regular intervals and published
agreed rates. In the summer of 1873, however,
Commodore Vanderbilt being at Saratoga, repre-
sentatives from the Erie and the Pennsylvania met
him there, and an arrangement was entered into by
which, in addition to agreeing upon tariffs, the roads
in question were to establish a board of arbitration
to adjust disputes. President Garrett, of the Balti-
more and Ohio, absent from the original conference,
but consulted later, was the only dissentient Ameri-
can. He refused to submit the independent action
of his road to any board of arbitration. A rate war
with his nearest neighbor in the combination, the
Pennsylvania, was therefore begun, which resulted
in the undoing of the work of the Saratoga Confer-
ence, and all four of the American lines going back
to the old arrangement of a mutually agreed-upon
freight tariff and independent action.
The Grand Trunk, cooperated with by numerous
small Western roads, started one of the most
momentous railroad wars ever known, and one that
bade fair for a time to transfer to Boston the com-
mercial supremacy previously enjoyed by New York.
The terminals of this line, by virtue of its connec-
ONE HUNDRED YEARS OF AMERICAN COMMERCE
107
tions, were Milwaukee and Boston, and between
these points rates were fixed at a figure that was
shortly diverting from Chicago and New York the
great stream of traffic, hitherto uninterrupted, be-
tween these great centers. Neither Milwaukee nor
Boston being competitive points for the other four
great trunk-lines, these roads were disinclined to
commence a ruinous rate war; but the divergence
of New York's trade to Boston became at length so
alarming, in the winter of 1875, that the New York
Central was forced to take action, which it did with
an initial and sweeping cut of sixty per cent. Fol-
lowing the invariable rule in such cases, the warring
parties soon reached the point when an agreement
was necessary, and a sort of truce was patched up
in December, which, after enduring a few weeks,
ended in a general me'le'e, in which the Erie, the
New York Central, and the Grand Trunk were the
most prominent, although after about eight months
the entire five trunk-lines were ready for almost any
sort of an agreement.
The significance of this earliest rate war, by which
Boston had benefited so greatly, was not lost upon
Philadelphia and Baltimore, and all through the
succeeding struggles the underlying motive was
found in the desire of one of the three other great
seaboard cities to surpass New York. With the
exception of Boston, already sufficiently favored by
the Grand Trunk, both Philadelphia and Baltimore
had always been conceded a slight differential ad-
vantage in rates to neutralize the difference in ocean
freights their location imposed. New York found
herself unable to concede the advantage longer when
her rivals began their war for supremacy, and vari-
ous more equitable substitutes were proposed and
tried. Nothing availed, however, to avert one final
struggle between all the lines ; and after rates had
sunk to from 2.8 mills to 3.5 mills per ton per mile
between the East and West, the roads at length
wearied, and the joint or " pool " system was for the
first time adopted on the great trunk-lines in 1877 ;
Colonel Fink, who had originated and successfully
carried out this idea two years before in the South-
em Railway and Steamship Association, being called
upon to take charge. Under the terms of this first
" pool " the Baltimore and Ohio received but nine
per cent., the Pennsylvania twenty-five per cent.,
and the New York Central and the Erie thirty-three
and a third per cent each.
The important relation which these four great
trunk-lines concerned in the East and West traffic
bear to the railroad system causes them to serve
most readily the purposes of illustration of the
tendency toward closer relations displayed by the
American railroads in their advance toward the
homogeneous, even if not united, system of the
future. Through wars almost numberless the out-
come has been seen in every case to have been the
assumption by the competitors of some mutual obli-
gation for the sake of peace. The " pooling " idea
thus traced to its first great manifestation has not
been, however, of such recent growth as might be
supposed. It was introduced into New England at
an early date, and quietly used for a long time.
The celebrated Chicago-Omaha pool of 1870 and
the Southern organizations also preceded the Trunk-
Line Association ; but all of these were largely ex-
perimental, and certainly lacked the coherence aris-
ing from the discipline of an actual central authority.
When, after years of the bitterest war, however, the
great trunk-lines finally came to adopt it, men real-
ized that it had been inevitable. To-day, while rate
wars and the tactics of competition are by no means
ended, nor ever will be so long as many interests
compete for similar ends, their effects are no longer
so ruinous as twenty years ago. With the great
corporate interests vested in the railroads joining
with one another for mutual protection and advan-
tage, that thing most vividly pictured by the dema-
gogues has never come to pass. Instead of a great
monopoly crushing the public rights underfoot is
found a condition of things so vastly improved since
1873 that it seems scarcely possible that railroad
science can have advanced so greatly in so short a
space of time. Rates have fallen to a point abso-
lutely impossible before the era of improvement, and
both freight and passengers are now transported for
less money, and with more safety, speed, and con-
venience, than in any other country on the face of
the earth. Freight rates, which in 1873 averaged
1.985 cents per ton mile on the great trunk-lines,
fell in the twenty years ending in June, 1893, to .8
of a cent per ton mile, a reduction of nearly sixty
per cent. In the West and in the South the reduc-
tion has been much greater. In order to better
understand the tremendous significance of this
decrease a further reference to the figures will be
useful. The shippers of the country paid in round
figures the sum of $808,000,000 for the transpor-
tation of their freight in 1893. Had the rates of
twenty years ago still prevailed, the sum of $2,020,-
000,000 would have been required to meet these
charges. Thus the people and the commercial in-
terests of the United States were saved an annual
amount of $1,212,000,000.
Such a tremendous falling off in rates has, of
108
ONE HUNDRED YEARS OF AMERICAN COMMERCE
course, only been withstood by the railroads by the
exercise of the most rigid economies, the adoption
of every improvement tending to minimize the cost
of operation, and an adaptation to latter-day needs,
which, on the closest of profit margins, demand a
volume of business of gigantic proportions in order
to balance the long account of the fixed charges.
Nor has this wonderful change in railroad conditions
come about without injury to the corporations en-
gaged. No less than forty per cent, of the mileage,
representing about thirty-one per cent, of the prop-
erty valuation of the railroads, has been forced into
bankruptcy during this period. The lines that have
survived the strain have done so only by the ex-
penditure of millions in the improvement of their
properties.
One of the greatest, as it is perhaps the most
important, of all these changes has been the intro-
duction of steel rails in the place of the old iron
ones. In the twenty years following the adoption
of these rails on the New York Central the volume
of traffic increased from 400,000,000 ton miles to
2,000,000,000 ton miles. With the old iron rails
such an enormous traffic would have been practically
impossible, and its cost absolutely prohibitive. Be-
ginning with a rail but little heavier than the iron
ones then in use, the weight has been gradually
increased as its economy was appreciated. To-day
the loo-pound rail is in not uncommon use on lines
of heavy traffic, especially on curves and grades,
and it has been found one of the most potent factors
in reducing cost both in draft-power required and in
diminishing wear and tear on rolling-stock. The
increased use of steel in place of iron for rails,
resulting in the practical displacement of the latter
by the former, is best shown in the figures giving the
annual production of railroad bars during the period
covered by the change.
PRODUCTION AND DOMESTIC CONSUMPTION
OF RAILROAD BARS.
RETAINED FOR
YEAR.
IRON.
STEEL.
TOTAL.
DOMESTIC
CONSUMPTION.
Tans.
Tons.
Tom.
Tons.
1873. •
679,520
"S,I92
794,712
794,371
1875.
447,901
259,699
707,600
706,598
l88o.
440,859
864,353
1,305,212
1,304,181
1885. .
1890. .
13,228
13.882
963,750
1,871425
976,978
1,885,307
973,009
1,869,426
1892. .
10437
1,541407
1,551,844
1,536,146
The tons in this table are figured at long weight,
2240 pounds.
A still clearer idea of the increase in the use of
steel rails, expressed in mileage, may be had from
the fact that where in 1880 there were 81,967 miles
of iron to 33,680 miles of steel rails, there were in
1892 only 38,641 miles of iron as against 182,858
miles of steel rails, an increased percentage of steel
from 29.1 to 82.6 of the total mileage.
The direct result of the introduction of steel rails
was an increased weight of rolling-stock, and an in-
crease in more than an arithmetical proportion of
the carrying capacity per car. The freight-car of
a capacity of 30,000 pounds, used a few years ago,
is obsolete and wasteful, while those of 60,000
pounds and of even greater capacity are now in
general use, and may be classed as standard. As
cars increased in weight so did the locomotives.
With the heavy steel rail came of necessity the
weightier and more compact road-bed, and stone-
ballasted ways succeeded the old dirt embankment.
Over this, immense weights can roll freely, and the
locomotive has become a mammoth. In place of
the little one-ton Tom Thumb of Cooper, or the
heavy seven-ton engines of the Stephensons, are
found to-day the sixty and seventy ton passenger-
fliers and the eighty and ninety ton freight-engines.
One giant of the modern rail is a ten-driver freight-
locomotive of the Lake Erie and Western, which
weighs, as it couples to its train, 115 tons, and could
draw the combined rolling-stock of every road exist-
ing in the United States in 1835.
Important as track and road-bed are to this de-
velopment, they are but a part ; and as the strength
of a chain is that of its weakest link, so would the
modern railway fail were it not for the improved
bridge construction which has also come during the
past quarter of a century. All bridges in the earlier
days of the railroad were of wood, and the long
trestleworks with which the old engineers crossed
uncomfortable swamps are still well remembered.
Apart, however, from the question of its structural
strength, the wooden span was dangerous from other
reasons : it would decay in the weather ; it would
burn if a hot coal dropped ; and it would warp and
shrink if the material used in its construction was
unseasoned. Even an improved truss, obviating to
a certain extent the latter fault, was insufficient to
make the wooden bridge either a safe or a profitable
feature of railway construction, and by 1870 it had
begun to retreat before the iron bridge. This latter
material has now so nearly superseded wood in the
bridges of the country that it is scarcely necessary
to discuss it. The many designs of truss and span
give wide variety in its application, from great sus-
pension-bridges to lofty viaducts. One of the latest,
and perhaps the greatest achievement of the bridge
ONE HUNDRED YEARS OF AMERICAN COMMERCE
109
builder's art, is the so-called cantilever, which may
fairly be claimed as an American invention, since
the first suggestion of it came from Thomas Pope,
who proposed in 1810 a cantilever bridge across the
East River. The first cantilever bridge built for
railroad traffic was across the Kentucky River,
C. Shaler Smith being the engineer. Since then there
have been some wonderful examples of this style of
construction.
The bridges and road-beds, improved as outlined
above, have constituted lines over which the enor-
mous traffic of to-day passes easily and cheaply.
Single locomotives now draw trains weighing 2500
tons. Huge palace-cars, weighing as much as a
whole train did in the earlier days, are now whirled
along at a rate that fifty years ago would have been
considered beyond mortal attainment. Still engi-
neers and railway officials are not satisfied, and there
is a never-ceasing endeavor on all sides to advance
still further. The introduction of electricity as a
motive power, already heralded by the Baltimore
and Ohio in their Baltimore subway, and by the
line at Nantasket, Mass., is the first step in what
many able engineers believe will be an advance to
speed in comparison with which that of to-day will
seem as little as already does the "frightful velo-
city " of forty years ago, when a traveler held his
breath if the speed was greater than thirty miles an
hour.
A very natural query raised by the discussion of
speed on the modern railway is how it has been
accomplished concurrently with perfect safety. That
traveling is nearly as safe as remaining at home is
generally conceded, and in the United States espe-
cially fewer deaths are placed against the railroads
in proportion to the miles traveled than in any other
nation. Even with this favorable showing the laws
are so rigid in holding railroad corporations to the
strictest liability that nearly $2,000,000 annually are
awarded in death-claims and damages against them.
Spurred on by the strictness with which they were
held to account, and, little as it may be believed,
actuated also by humane motives, the railroads have
adopted every new and improved appliance tending
to increased safety.
Since the first use of the telegraph on the line of
the Baltimore and Ohio, everything tending to place
hundreds of miles of road under central and system-
atized observation and control has been adopted as it
appeared. The train despatcher, with his numerous
assistants, in the great union station, now directs
the movements of every train. Not a driving-
wheel turns but by his orders, nor a moment of lost
time is noted that is not at once explained to him.
The great switch-towers, where scores of levers
concentrate the directing force of acres of steel
network, are the development of the interlocking-
switch system. Air-brakes, torpedoes, flags, lights,
semaphores, electric enunciators, derailment guards
and split-rail switches, safety-bolts, and, last and
greatest of all, the block system, guarding both ends
of the flying express at once, are some of the meth-
ods and devices by which safety has been secured.
Of these, next to the block system, the air-brake,
which was first applied to passenger-trains in 1868,
is perhaps one of the most notable advances.
The evolution of the rolling-stock of the railroads,
particularly as it is connected with the passenger
service, began almost with the introduction of train
service. The English compartment coach was
quickly superseded by the so-called American car,
with its central aisle, side-seats, and undivided space.
The first sleeping-car, which was simply an ordinary
passenger-car fitted with rude wooden berths, was
run on the Cumberland Valley Railroad of Pennsyl-
vania from Harrisburg to Chambersburg in 1836.
Sleeping-cars continued of the same crude sort until
1864, when George M. Pullman built the first of his
modern coaches in the shops of the Chicago and
Alton road. This car, named the Pioneer, was both
too heavy and too wide for the roadways of that
day ; but a special car being required to convey the
body of President Lincoln after his assassination,
the Pioneer was taken, and the Chicago and Alton
altered its road to suit its dimensions. Later, when
President Grant traveled through the West, this car
was taken, and several of the other roads made the
changes necessary to its passage over their lines.
Thus the Pullman car was introduced, and the
Pullman Car Company was organized in 1867.
The Wagner palace-car was also early in the field,
especially on the Vanderbilt lines. The first hotel
or buffet car was built in 1867, and the Delmonico,
the first Pullman dinner-car, was ran on the Chicago
and Alton road in the year following. The vesti-
bule, making a safe passageway between the cars
of a moving train, was first suggested by a sort of
canvas diaphragm used to connect cars on the
Naugatuck Railroad in Connecticut in 1857, but it
was not until 1887 that the first vestibuled Pullman
train was operated. To-day a vestibuled limited
express has several luxurious sleeping or chair cars,
a dining-car, smoking-saloon, library and writing-
room, with stenographers and type-writers in atten-
dance, bath-room, and barber-shop. The old-time
method of tickets issued by each line separately,
110
ONE HUNDRED YEARS OF AMERICAN COMMERCE
involving change of cars and several payments of
fare, is now done away with by the system of
coupon tickets, in regulation of which the passenger-
agents department of the different railroads has
assumed a complexity of detail second only to that
in the freight department.
The government's use of the railroad for the con-
veyance of the mails is too generally understood to
require more than a brief mention. Congress, on
July 7, 1838, constituted every railroad in the
United States a post-route. For this service a stip-
ulated amount per pound has always been paid the
railroads as common carriers of freight mail-matter.
A special compartment in the baggage-car served
for many years for the mail; but in 1864 Colonel
Armstrong introduced the railway mail-car, as had
been suggested two years before by W. A. Davis, a
clerk in the St. Joseph post-office. The first fast
mail-trains were run in 1874 by the New York
Central, and a little later by the Pennsylvania.
The receipts from the mail service, together with
those from the express companies, etc., make up
about five per cent, of the revenues of the railroads,
and the passenger service contributes about twenty-
five per cent. ; while the transportation of freight,
which is the bulk of the business, adds seventy per
cent, to the incomes of the railroad corporations.
The rolling-stock necessary to the transaction of
this business, as apportioned among the different
branches, is as follows :
Passenger-cars 27,909
ge, mail, and express cars 7>937
35.846
1,191,884
1,227,730
Freight-cars
Total cars
Locomotives 36,293
The freight service being, therefore, the most im-
portant function, financially and commercially, of the
railroads, it has attained an economic importance
of the first magnitude. In this phase it has already
been considered, but in its practical working there
has been developed a system of such far-reaching
scope and immense potentiality that it deserves de-
scription. The days when no road allowed its
freight-cars to leave its own tracks have long since
passed. The expense and delay incident to the
frequent transhipment of through freight became
insupportable, and the commercial world rebelled.
The adoption of a standard gauge and the accep-
tance of the principles of joint traffic began directly
after the Civil War, and have extended until they
have reached the present conditions. Freight is
now loaded in a car at New York and not unloaded
until it reaches San Francisco. Each line over
which the car travels on its journey charges its own
rates and receives its due proportion of the total
charges. The road owning the car in which the
goods are shipped receives in addition from three
eighths to three fourths of a cent per mile from the
other roads, for whatever distance the car may
travel on their lines. The theory is that the Eastern
car, when it reaches San Francisco and is unloaded,
is to be returned to its home line as soon as pos-
sible. Unfortunately in practice this results but un-
satisfactorily, despite the thorough organization of
the modern car-accountant's department. Delays
in unloading, reloading for a point on the home-
ward journey, reloading consigned to order, and
hundreds of other causes contribute to make more
than problematical the date of return of a car that
has once got out of home territory. Plans to remedy
the detention and "to order" abuses have been
proposed and tried in great number, the per diem
plan of demurrage or car rental, advocated by Mr.
Fink, and introduced for a short time on the trunk-
line roads in 1888, being about as successful as any.
The so-called fast freight lines are an important
feature of this branch of railroad transportation.
They are of two kinds. The first is simply the
development carried a little further of the system
already described — the application of the coopera-
tive principle among a number of roads. The sec-
ond is the operation of cars by a private corporation
deriving its revenue from the same mileage charge
with which the railroads compensate one another for
the use of their rolling-stock.
Through all these various channels the great vol-
ume of the country's traffic flows steadily back and
forth. If our system is not the best in point of
routine detail and administration, it is still easily first
in that far more important consideration of cost.
Nowhere in the world is freight hauled so cheaply
as it is in the United States. The average cost of
transportation per ton mile is, as has already been
stated, .8 cent. In Europe it is two and one half
times as much, or two cents per ton mile. The
difference amounts in the annual aggregate to mil-
lions of dollars, the greater part of which represents
an actual saving to the people of the country on the
standard articles of consumption and necessaries of
life. The actual value in dollars and cents which
this saving represents can easily be figured from the
totals given by "Poor's Manual" for 1895: the
number of tons of freight moved was 675,129,747,
and the average length of haul 121.89 miles, giving
ONE HUNDRED YEARS OF AMERICAN COMMERCE
in
82,289,400,498 ton miles. Estimating the average
difference between American and European rates at
1.2 cents, the difference in total charges, accruing
as a clear saving to the public, is $987,472,805.97.
The strikes and labor troubles from which the
railroads have ever suffered are scarcely to be dis-
cussed within the limits of this article. The first
great strike appears to have been that on the Balti-
more and Ohio in 1857, and the last was the
uncalled-for and disastrous Chicago riot of 1894.
It is scarcely possible to measure in money the
damage done, since, apart from the losses sustained
by either party to the dispute, is the loss to the
business interests of the country through impeded
transportation and obstruction of the mails. Any
one branch of business that employs, as the railroads
do, 2,000,000 people is, of course, liable to labor
troubles ; but in view of the relations held by the
railroads to the general interests of the country, it
is scarcely reasonable that the conveniences and
necessities of nearly 70,000,000 should be disre-
garded, even if the interests of the other 2,000,000
were being thereby advanced, which is by no means
so certain as labor leaders would make others think.
The growth of the railroads of this country, coin-
cident as it has been with Western development,
has witnessed a steady march of the mileage center
in the direction popularly supposed to be taken by
the star of empire. This advance, together with the
relative growth of railroad mileage of the different
groups of States, is shown by the following tables :
MILEAGE CENTERS.
1840 25 miles west of Mauch Chunk, Pa.
1850 25 miles northwest of Williamsport, Pa.
1860 60 miles south of Mansfield, O.
1870 Paulding, O.
1880 30 miles northwest of Logansport, Ind.
1888 90 miles south-southwest of Chicago, 111.
MILEAGE INCREASE BY GROUPS OF STATES.
1850.
i860.
1870.
1880.
1890.
New England. . . .
2,507
3,660
4A94
5,982
6,831
Middle States
Southern States . .
Western States and
3,202
2,036
6,705
8,838
10,964
11,192
15,872
14,778
21,53°
29,209
Territories ....
Pacific States and
1,276
11,400
24.587
52-589
62,394
Territories ....
21
1.677
4,080
0,804
The last subject to be taken up in the discussion
of the American railroad falls more properly within
the domain of the financier. When it is remembered
that $5,075,629,070 capital stock and $5,665,734,-
249 of bonded indebtedness are represented by rail-
roads in this country, the importance of the financial
interests involved becomes readily apparent. Financ-
ing has come to be as essential a department of railway
management as any other, and is, generally speaking,
more complicated and less capable of explanation.
Historically considered, railroad securities, which
have been for years the most prominent feature of the
money market, have had numerous ups and downs.
In the very earliest days, when all roads made
money freely, and the field had not yet become
overcrowded, investors subscribed for railroad stock
almost as fast as it could be issued. The crisis of
1857, with its demonstration of the liabilities of
stock under the bondholders' mortgage, caused a
sudden and violent reversion of public sentiment in
favor of the latter class of securities. Here again
the pendulum swung too far in the opposite direc-
tion. It was a simple matter for unscrupulous men
to organize a company and pay in a small fraction
of the stock and float their bonds. The bonds once
floated, some favored construction company would
be given the contract to build the road at a price
from ten to forty per cent, in advance of its real
cost. Then the first reverse threw the road into
bankruptcy, and under their mortgage the bond-
holders would take possession, thus securing a road
worth far less than the face value of its bonds, and,
as shown, from ten to forty per cent, less than the
investment made at the price for which these bonds
had been floated.
The crisis of 1873 brought the abuses under the
bond system home to many, but the bitter days
during 1885 were necessary to fully impress the
lesson upon the public mind. Since then a better
understanding of conditions has prevailed, and under
responsible managements the securities of the rail-
roads have come to represent intrinsic values, reliable
and stable, except so far as all great interests are
subject to prevailing national conditions.
The present condition of the railroads of the
United States is thus summarized in a statement of
their revenues and expenditures in " Poor's Manual "
for 1895 :
STATEMENT OF RAILROAD CONDITION AND
REVENUES.
Capital stock $5,075,629,070
Funded debt 5,665,734,249
Unfunded debt 383,567,232
Current debt 440,669,656
Total liabilities $1 1,565,600,207
Cost railroad and equipment $9,789,1:43,001
Real estate, stocks, bonds, and other invest's. 1,167,879,162
Other assets 240,526,350
Current accounts 226,502,371
Total assets $11,924450,884
Excess assets over liabilities $358,850,677
112
ONE HUNDRED YEARS OF AMERICAN COMMERCE
STATEMENT OF RAILROAD CONDITION AND REVENUES. —
Continued.
Passenger-traffic earnings $276,031,571
Freight-traffic earnings 700477,409
Other traffic earnings 91,134.533
Elevated roads (New York) 12,661,502
All other receipts, including rentals received by
lessor companies 9^,477>443
Revenue $1,176,782458
Interest on bonds $237,620,367
Other interest 7464,971
Operating expenses 757>765,739
Dividends 85,278,669
Rentals, tolls, etc 60,900,454
Miscellaneous 38,220492
Payments $1,187,250,692
Excess of fixed charges and miscellaneous pay-
ments revenue $10468,234
Pacific coast roads were the heaviest sufferers. Con-
sumption had almost ceased in the articles which
were superfluous, or purely for ornament, and the
demand for other articles ceased as far as was pos-
sible. Under these circumstances manufacturers had
little to deliver, and merchants and dealers found
it impossible to pay for more than a moiety of what
they had required in previous years. In the face of
this tremendous decline in receipts the railroads set
themselves to a retrenchment of expenses that re-
sulted in reducing the net loss in earnings to a point
where, in some few notable cases, the net income
increased. How vast these economies were is best
shown in the following table, including a selected
number of the larger and better-known roads:
ECONOMIES OF RAILROADS, 1894.
RAILROADS.
DECREASE IN GROSS
EARNINGS.
DECREASE IN NET
EARNINGS.
ECONOMIES.
$12,794,499
$2, 44s, 120
$IO.74Q,77O
Atchison, Topeka, and Santa F6* (four roads)
7.Q6S.Q56
C, 706, 747
2,2s<),21?
6,841,605
I,4C7,727
5,787,882
Philadelphia, Reading, and C. and I
6,083,823
I,742,6l2
4.741,21 1
Delaware, Lackawanna, and Western (three roads) .
5,732,111
1,203,734
4. 528,777
Chicago, Milwaukee, and St. Paul
{,386.656
1*457,7?^
7,Q77, 7OI
New York Central and Hudson River
4,913,080
7O4,t; 62
4,208,518
New York, Lake Erie, and Western
4,888,272
2.5 72, 717
2.3I5.Q55
Chicago and Northwestern
4,680,6^8
2,491,366
2,189,272
4,607,006
3.477,0 <; 7
1.120,040
Illinois Central
?,6oi;,6^8
2,311,809
1,383,829
Southern Pacific (six roads)
7,571,701
2,092,716
I,47Q.O75
Baltimore and Ohio (two roads)
3,485,692
1,245,263
2,240,420
Michigan Central and Canada Southern
3,478,000
767,000
3,115,000
Northern Pacific
7,046,726
1,520,518
1,526,208
2 604.000
i 087 <;is
I S2O tj8,l
Chicago and Alton ...
1.274.604.
247.2O2
I O27.4O2
Manhattan Elevated .
I.I4Q,6<Q
I O2I,7l I
I27.Qd8
The financial and commercial troubles of 1893
developed in the railroads a new phase of adminis-
trative excellence that is the highest tribute that can
be paid, in closing this article, to the men who are
in practical charge of the great railroads of the
country. By the report of the Interstate Commerce
Commission, the year ending June 30, 1894, wit-
nessed a shrinkage of $840 per mile in the gross
revenues of 570 roads, representing a total mileage
of 149,559. Dividends on these roads fell off
$3,999,169, and there was a total deficit in their
accounts of $28,255,121. The Southeastern and
To treat the vast subject of the history of Ameri-
can railroads exhaustively in an article the limits of
which are circumscribed by the exigencies of space
would be manifestly impossible. If I have succeeded
in conveying a picture to the mind, although set in
a small frame ; if I have succeeded in demonstrating
the importance of our railroad system as a matter in
which every patriotic and intelligent citizen is deeply
concerned ; and if I have, by telling what has been
done, foreshadowed the unlimited possibilities of the
future, I shall feel satisfied with my effort to cover the
ground of American railway history, however briefly.
CHAPTER XVII
AMERICAN CAR BUILDING
THE memory of men still living is sufficiently
elastic to stretch back to the beginnings of
steam-railroads in this country, and to com-
prehend the various changes by which the modern
railway has become a highly organized and elabo-
rately equipped mechanism. We borrowed the rail-
way from England, but developed it on our own
lines. The invention of the locomotive at first
simply furnished a mechanical power to transport
freight in cars that had formerly been hauled by
horses. Tramways were in use in the Hungarian
mines during the sixteenth century ; and Ralph
Allen's English stone-car of 1734, with its flanged
wheels and its hand-brake, is clearly the forerunner
of the freight-cars of to-day.
The term "railway" was invented in 1775, when
it was first used in Smeaton's reports on English
transportation, a quarter of a century before steam
was applied to locomotion. Thanks to the recent
researches of Mr. Clement E. Stretton, we now
know that the first persons ever conveyed by a
locomotive on rails traveled, on February 24, 1804,
behind Trevethick's locomotive on the Pennydarran
cast-iron plateway or tramroad to Merthyr-Tydvil,
in Wales, a .distance of nire miles. In order to
transport long bars of iron and timber, the cars were
made in pairs, coupled together by an iron draw-bar
having a joint at either end. The cars had no
sides, but in the middle of each was fixed a center-
pin upon which worked a cross-beam or bolster, and
upon this cross-beam the timber or bars of iron were
placed. On the occasion adverted to the trucks
were loaded with ten tons of iron bars, and seventy
persons stood on the iron. Here we have the origin
of the bogie or truck, the invention of which has
been claimed for this country, as we shall see here-
after. Also the capacity of the freight-car, fixed at
the beginning at ten tons, remained at that figure
for half a century or more.
In 1812, John Blenkinsop, of Leeds, had a pri-
vate car built to carry himself and his managers to
his Middleton colliery, while the workmen rode on
the coal-cars. On July 27, 1814, George Stephen-
son's first locomotive, Blucher, drew over the Kenil-
worth colliery line a passenger-car made by placing
the body of Lord Ravensworth's four-in-hand coach
on a wooden frame fitted with flanged wheels.
This car was used for twenty years. On Septem-
ber 27, 1825, the Stockton and Darlington Railway
was opened, and trains of coal-cars were run, with
one passenger-coach, named the Experiment. This
was the first passenger-car to be run regularly for
the use of the public. It was placed on four
wheels, and had a door at each end, with a row of
seats along either side and a long deal table in the
center. This car was operated ten days, until the
novelty was worn off; and then the faster stage-
coaches carried the passengers. It was not until
September 15, 1830, that the Liverpool and Man-
chester Railway opened its line with a train carrying
600 passengers, and immediately thereafter began to
run the first regular passenger-trains.
It is a striking fact in the history of car construc-
tion that the English invented both the truck and
the long passenger-car with the door at each end ;
and that these forms, once invented, were almost
immediately discarded in England, so that it was
left for this country to reinvent them and to make
them the distinguishing features of American car
building as contrasted with English construction.
Indeed, it has been with great reluctance that we
have ceased to claim them as original discoveries.
The fact that passenger-trains, by displacing
stages, threw out of use many of those vehicles,
coupled with the other fact that the stage owners,
submitting to the inevitable, often became railroad
promoters, furnishes a reason why the early masters
of transportation both used the stage-coach body as
a matter of economy, and also built their new cars
on the model in which the conveniences of travel
113
114
ONE HUNDRED YEARS OF AMERICAN COMMERCE
had been most highly developed. The first passen-
ger-coach used in Pennsylvania in 1832 was a stage-
coach slightly enlarged. To be sure, the early prints
show that in 1830 Peter Cooper's first locomotive
hauled an open boat-shaped car from Baltimore to
Ellicott's Mills, on the Baltimore and Ohio Rail-
road ; but this model must have been adopted for
economy's sake, because in 1833 that railroad placed
in service the Ohio, a stage-coach in shape, with seats
on top as well as inside.
As President Mendes Cohen well observed in his
address before the American Society of Civil Engi-
neers in 1892, the first important modifications in
car building were called forth by the speed devel-
oped in the locomotive. Naturally the wheels first
demanded attention. The names of four men
are connected with early wheel improvement. Mr.
Knight improved the shape of the tread and flange ;
John Edgar and Ross Winans developed the chilled
features ; and Phineas Davis further improved and
perfected the wheel by altering the disposition of
the metal in the tread and the angle of the flange,
and by introducing within the cast-iron wheel a
wrought-iron ring of five eighths or three quarters
of an inch round iron, which both perfected the chill
and also added strength to the wheel. Mr. Winans's
shops turned out thousands of these wheels for use
not only in this country, but also in Germany and
Switzerland. From 30,000 to 50,000 miles repre-
sented the capabilities of a Winans wheel.
With increased speed came the need for increased
steadiness, and it occurred to Ross Winans that by
adopting the device of the bogie, or swiveling truck
used in the transportation of freight, he could build
an easy-riding passenger-car. In 1833 Mr. Winans
constructed three long houses on wheels, each capa-
ble of seating sixty passengers. Having patented
his invention, he was confronted by the fact that the
principle he had used was one that had been utilized
frequently on tramways, and particularly on the
famous Quincy granite railroad, built to transport
stone for the Bunker Hill Monument. At the end
of protracted litigation the courts annulled the
patent.
We now know that prior to 1830 England had
three bogie-engines at work; that in 1831 Stephen-
son's John Bull, built for the Camden and Amboy
road, was made into a bogie after it reached this
country— a fact made patent by the famous run of
that engine from New York to Chicago in 1893;
that Horatio Allen used a bogie-engine on the South
Carolina Railroad in 1832, the same year in which
the bogie-locomotive Experiment was built for the
Mohawk and Hudson Railroad. Moreover, the
bogie principle was patented in England in 1812.
Yet, whatever may be the legal aspects of the case,
it is certain that the American passenger-car of to-
day originated with the three passenger-coaches
built in Ross Winans's shops in 1833. England
discarded the bogie principle for engines in 1830,
and did not return to it until 1876 ; and that coun-
try to this day has not adopted the bogie for passen-
ger or freight cars. In 1889, the Paris, Lyons and
Mediterranean Railway adopted the bogie for cer-
tain passenger-cars; and this year (1895) the Great
Western Railway of England has begun to experi-
ment with the bogie-truck. In America the Winans
passenger-coach almost immediately supplanted
everywhere the stage-coach form, which England
still retains in a modified shape, excepting only on
the Pullman cars, introduced into that country in
1874. With us not only the passenger-cars, but the
baggage, mail, and freight cars, all were placed on
swiveling trucks.
That the early railroads of this country were
designed to carry passengers rather than freight is
to be seen by their reports. The Baltimore and
Ohio road, from January i, 1831, to October ist,
carried over its thirteen miles of track 5931 tons of
freight and 81,905 passengers; and so late as 1839
the Camden and Amboy carried only 13,520 tons
of merchandise as against 181,479 passengers. In
fact, the railways as freight carriers could not com-
pete with the canals, which in those days were the
traffic routes. In 1831 the Tuscarora and Port
Carbon Railroad could not meet canal rates by
thirty-nine and one quarter cents per ton, the railway
charges being forty cents, plus a toll of fifteen cents
per ton, while the canal rates were ten and three
quarter cents, plus five cents toll.
Mr. John Kirby, describing from memory the
freight-car of 1848, says that it was the same square
box it is to-day ; its capacity was from six to ten
tons ; the roof was covered with cotton duck painted
and sanded. The hot sun cracked this covering and
let the water in on the freight, an annoyance com-
mon also to passenger-coaches of that day. Few
freight-cars were used in New York State at that
date, the Erie Canal being sufficient for summer
freight. Wood was the universal fuel, so there was
no coal transportation. Wooden brake-heads were
used, and it required three men to turn the screw
that pressed the wheels on and off the axles. The
ripping of planks was done by hand, as was also the
dressing up ; and when one man had tools to grind,
a fellow-workman turned the stone. Carpenters
ONE HUNDRED YEARS OF AMERICAN COMMERCE
119
and car builders of six years' experience commanded
$1.12^ a day wages.
Viewed from the standpoint of to-day, the passen-
ger-car of the early fifties, built at a cost of about
$2000, was a combination of inconveniences. The
cast-iron stove in the center of the car broiled those
who sat immediately around it, while the unfortu-
nates one seat removed from its satanic glare shivered
and froze. In summer the dust was intolerable, and,
notwithstanding elaborate devices for ventilation,
the dust problem did not begin to be solved before
the appearance of the monitor roof in 1860. Hot-
water heating and the abolition of the deadly car-
stove came with the Pullmans.
In 1856, Captain (now Sir) Douglas Gallon, of the
Royal Engineers, was sent to America to investigate
our railways. His report to the Lords of the Privy
Council for Trade gives a straightforward and un-
biased account of his investigations. Perhaps there
is extant no other report which so comprehensively
discusses the railway situation in the United States
about that date.
" The practice of constructing railways [in Amer-
ica] in a hasty and imperfect manner," says Captain
Gallon, " has led to the adoption of a form of roll-
ing stock capable of adapting itself to the inequalities
of ihe road ; il is also conslrucled on ihe principle
of diminishing ihe useless weighl carried in a Irain.
The principle is that the body of the car is carried
on two four-wheeled trucks, to which the body is
attached by means of a pintle in the center, the
weight resting on small rollers at each side. The
framing of the truck is supported on springs resting
on the axles, and the pinlle and rollers are fixed lo
a cross-beam, which is attached by springs to the
main framing ; so thai belween ihe body of ihe car
and ihe axles are a double sel of springs. India-
rubber springs are in general use, bul ihey oflen
become hard ; consequenlly somelimes sleel springs
are used, wilh greal advanlage. Any side move-
menl which mighl resull from Ihe slight play allowed
to ihe cross-beam is counteracted by springs placed
between its ends and the framing. An iron hoop
attached lo Ihe framing passes under Ihe axle on
each side, so as to support the axle in case it should
break."
The bearings Captain Gallon found nol unlike
those used in England, bul the use of oil as a lubri-
cator was novel. He was told that under favorable
circumstances the oil in an axle-box needed to be
renewed but once a month ; but thai it was difficult
to oblain good oil. The wheels were of cast-iron,
with chilled tires ; they were from ihirty lo ihirly-six
inches in diameter, weighed rather more than 500
pounds, and were without spokes. When made by
the best makers they would run from 60,000 to
80,000 miles before the tires were worn, and they
cost from ^3 to ^3 los. each. The iron used in
making wheels was of very superior quality ; and so
great was the practical skill required that but three
firms in the United Stales could be relied on to
furnish wheels of the firsl grade.
The mosl approved form of draw-bar was contin-
uous under the car, and was attached to the elliplic
springs, acling in both direclions. The iron shackle
was in general use, bul some railways preferred an
oak shackle eighleen inches long, two inches thick,
and six inches broad. This block was bound with
an iron band divided on each side at the center, so
thai a car on leaving Ihe rails would break the
shackle transversely.
Already the automalic coupler for freighl-cars
was prefigured in a device by which ihe pin in ihe
bumper of one of ihe cars was supported by means
of a ball, so that the shackle of Ihe on-coming car
pushed back Ihis ball and lei ihe pin fall inlo ils
place. All passenger-cars and most freight-cars
were supplied with brakes; and the Philadelphia
and Reading Railroad was endeavoring to anticipale
ihe day of train-brakes by an invenlion whereby
a sudden check in ihe speed of ihe engine applied
the brakes lo ihe wheels of all ihe cars. The
saloon, the car-stove, and ihe ice-water tank all had
established ihemselves in Ihe besl cars, and were
novelties to the visiting Englishman.
On the Illinois Central, between Cairo and
Dubuque, some of the cars were filled with com-
parlmenls in which ihe backs of seats turned up and
so formed two tiers of berths or sofas, for Ihe
accommodalion of persons who mighl wish lo lie
down and were willing to pay for the privilege.
The passenger-car had atlained a lenglh of sixty
feet, though the thirty and forty-five foot cars were
more common ; the baggage-cars, with their com-
partments for mail and express, were thirty feet long,
and the freight-cars from twenty-eighl to thirty feet.
In those days the freighl-cars were conslrucled more
strongly lhan were the passenger-coaches ; a Balti-
more and Ohio freight-car twenty-eighl feet long,
and with a capacity of nine tons, itself weighed six
tons.
In summing up the result of his observations as
lo ihe rolling slock in this country, Captain Gallon
notes thai ihe Americans appear to have taken their
ideas more from a ship than from an ordinary car-
riage, and to have adopted the form best calculated
116
ONE HUNDRED YEARS OF AMERICAN COMMERCE
to accommodate large masses, with a minimum of
outlay for first cost; and that while the cars had
been designed with a view to avoid every appear-
ance of privilege or exclusiveness, or of superiority
of one traveler over another, they had been con-
structed so as to secure to every traveler substantial
comfort and even privacy.
" There is but one class," he said ; " but as the
cars are designed with more regard to comfort than
English railway carriages, this class is much superior
to our second and third classes, and is inferior only
to the best first-class English carriages. Notwith-
standing the superior comfort of the American rail-
ways, the rates of fare averaged lower than the
second and sometimes even the third-class fares in
England."
Of necessity progress in car building had to wait
for the development of the railroads. The original
roads were not constructed as through lines between
the larger cities, but as the connecting-links between
natural waterways, answering to the portages or
carrying places of the old days when commerce was
conducted in canoes. Often built as the result of
local or State enterprise, a short line was sufficient
to use up the scanty capital available, or to exhaust
the willingness of the people to be taxed for public
improvements. The great systems of to-day repre-
sent survivals of the fittest early ventures, and de-
velopment according to environment. Thus the
various small roads which traversed the present
main line of the New York Central were not con-
solidated until 1853, and the same year the roads
between Philadelphia and Pittsburg came under one
control. So late as 1862 there were five separate
companies operating the lines between Lake Erie
and Lake Michigan ; and as each road had a gauge
of its own, it was regarded as a triumph in car con-
struction when freight-cars of compromise gauge
were built to run over all five roads. In 1869,
however, the Lake Shore and Michigan Southern
lines came under a single head.
When, in October, 1865, a combination was
formed among eight railroads to establish a fast
freight line between New York and Boston and
Chicago, the maximum difference in the gauges of
the several lines was one inch ; and this was com-
pensated for by a broad tread-wheel. Each com-
pany contributed a number of cars proportionate to
its mileage, one car for every three (afterward in-
creased to one for every two) miles. In 1865 the
quota of the Lake Shore and Northern Indiana was
179 cars; while in 1894 that road's quota of Red
Line cars was 2200.
In 1862 the United States government conducted
the greatest railroad business known up to that time.
With headquarters at Nashville, the government
operated 1500 miles of road with 18,000 men,
whose monthly wages amounted to $2,200,000.
The rolling stock consisted of 271 engines and 3000
cars. No entirely new locomotives were built, but
the 3000 men employed in the locomotive repair-
shops pieced out fully equipped engines founded on
a serviceable boiler or a pair of sound driving-
wheels.1 Among the triumphs of the national car-
shops were, first, a headquarters car for General
Thomas, the car being fifty feet long, iron-plated,
and provided with a kitchen, a dining-room, a sleep-
ing apartment, and an office ; and, secondly, the
hospital-trains, in which the jars and jolts were
reduced to a minimum. It was during the year
1864 that General McCallum and Colonel Wyman
came to Detroit and summoned the managers of the
Michigan Car Company to stop all building then in
progress and to work solely for the government.
They gave a contract for a number of box and flat
cars to be operated on Southern roads; and inas-
much as the gauge differed from that of the North-
ern roads, the new cars were loaded on flat cars and
sent to Cincinnati. The government officials fixed
the price of the cars and made payment in certifi-
cates, some of which the company exchanged for
materials, and the remainder were held until money
could be obtained for them.
The enormous transportation business developed
by the war, together with the labor conditions and
the paper-money issues, combined to raise the price
of cars; so that the standard freight-car of 1864, a
car twenty-eight feet long and with a capacity of
ten tons, cost $1000 or more. To-day a car thirty-
four feet long, with a capacity of thirty tons, and
provided with automatic couplers, air-brakes, and
other improvements, can be purchased for about
$500.
When the war ended the managers of railways
were called on to face a heavy decline in both
freight and passenger traffic, due to the disbanding
of the armies. Money was not plenty, cars were
very expensive, and the mania for extending lines
into new territory had begun. Under these condi-
tions the roads began a system of borrowing cars
from the builders or from car- trust companies. My
impression is that the Michigan Car Company was
the first to make contracts on a car-loaning basis;
be that as it may, this company had at one time
1 " Development of Transportation Systems in the United
States," by J. L. Ringwalt (1888). p. 210.
JAMKS MCMILLAN.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
117
loaned to railroads between 6000 and 7000 cars,
payment being made according to the car's mileage.
With better times and better credit the roads began
to buy cars for cash or on long time, as was most
convenient ; and loaning freight-cars to railroads on
a mileage basis practically has been discontinued.
A majority of the refrigerator-cars, however, are still
owned by private parties, and are run on a mileage
basis. The recent reduction in the mileage rate from
three fourths to three fifths of a cent has practically
killed the business of private ownership, since the
new rate does not much more than pay for the re-
pairs.
The sleeping-car had its beginnings as early as
1838. The Baltimore "Chronicle" for October
jist of that year described one such car that had
been put on the line between Baltimore and Phila-
delphia. The enthusiastic reporter related that the
car had berths for twenty-four persons, and that for
a small consideration the weary passenger might
spend the six hours of travel between those cities
as pleasantly as if he were asleep in his own bed.
Nothing then seemed to be wanting except dining-
cars, and those were promised for the near future — a
promise, alas ! not fulfilled for many a long year.
Twenty years later, in 1858, George B. Gates
invested $5000 in two sleeping-cars to run between
Cleveland and Buffalo ; but passengers could not be
persuaded to use them. The same year the line
between Toledo and Chicago was equipped with
two sleeping-cars built by the Wason Company,
of Springfield, Mass., and owned by Mr. Bates,
of Utica, N. Y. These cars were fifty feet long,
with sixteen sections in summer and fourteen in
winter. When not in use, the bedding and curtains
were stored in an end section ; and a single wash-
basin and one saloon furnished the toilet conve-
niences for the forty-eight persons the car was
expected to carry. A sofa along the side of the car
formed the lower berth, the middle one was hinged
to the window-casing, and the upper berth rested
on cleats fastened to permanent cross-partitions.
It was while traveling in one of these cars, in 1858,
that Mr. George W. Pullman began to plan the
sleeping-cars that have revolutionized railway travel
in this country, and are making their way in Europe,
where comfort is less an essential to the traveler
than it is in America.
In 1859 Mr. Pullman transformed two Chicago
and Alton coaches into better sleeping-cars than any
others ; but it was not until 1 863 that the Pioneer,
the first Pullman, was placed on the road. The car
cost $18,000 — an astounding price in those days.
It was higher and wider than most roads could admit,
and it was not until President Lincoln's funeral that
the roads between Chicago and Springfield nar-
rowed their platforms and adapted their bridges so
as to allow the Pioneer, carrying the funeral party,
to pass over their lines. Shortly afterward General
Grant's trip from Detroit to Galena, 111., in the
same car, opened those lines to the Pioneer. After
that time progress was rapid. The Pullman Com-
pany was organized in 1867, and its success is too
well known to need comment here. From the
palace sleeping-car to the parlor and the dining-
room car is a short step. But a long jump was
taken in the vestibule, invented by Mr. Pullman in
1887, by which trains are made solid and the plat-
form is robbed of the last of its terrors.
In the winter of 1868-69 the &Kl Westinghouse
air-brake was used on the Steubenville accommoda-
tion train running on the Pittsburg, Cincinnati, and
St. Louis Railroad. The Pennsylvania road adopted
it, and since the automatic feature was added, in
1873, it has come into almost universal use on pas-
senger-trains, while by far the larger proportion of
new freight-cars built are equipped with it.1 In 1887
a train of fifty freight-cars made a triumphal tour of
the great lines, and by repeated tests, under varying
conditions, proved that the Westinghouse brake can
stop a train in one tenth the space required by the
hand-brake. In 1867 Colonel Miller placed his pat-
ent platform, buffer, and coupler on three cars build-
ing in the shops at Adrian, Mich. ; and with great
rapidity the dangerous old platform, with its loose
link-coupling, disappeared. In 1860 the Post-Office
Department began to demand more room from the
railroad companies, and year by year the mail-cars
were increased from seventeen to twenty feet in
length, then to thirty-five, and finally to sixty feet.
The " Fast White Mail " now requires two trains
each way between New York and Chicago. Each
train is made up of six mail-cars, and the second
train leaves New York three hours before the first
train reaches Chicago.
The interchange of cars among the various roads
made it necessary to adopt standards in car con-
struction, in order to facilitate repairs to cars when
away from the home road. Some authority, too,
was needed to settle disputes between roads, arising
from charges for repairs ; to investigate new brakes
and couplers ; and, in general, to keep the work of
construction fully abreast of the times. The Master
Car Builders' Association, organized in 1867, amply
1 Out of 331,094 freight-cars fitted with train-brakes up to
June 30, 1894, 315,729 had the Westinghouse brake.
118
ONE HUNDRED YEARS OF AMERICAN COMMERCE
fills this need ; and the reports of its annual meetings
contain the latest word on all subjects relating to
car building. Its arbitration committee also acts as
a court of conciliation for the various roads.
Few railroads in this country build their own cars,
most roads finding it cheaper to buy of car com-
panies, and to confine their own work to repairs.
There are some exceptions. The Pennsylvania Com-
pany, which is a large purchaser, in 1894 built 1963
cars to replace its worn-out and damaged equipment,
besides repairing 66,437. The maximum capacity
of the Pennsylvania shops is twenty-eight cars a day,
or about one half that of the largest works not con-
ducted by a railway company.1 In June, 1 894, there
were in the United States 33,018 passenger and i,-
205,169 freight cars, besides 39,891 cars used in the
service of the roads, and also the privately owned
cars. Of the freight-cars, 25.20 per cent, are fitted
with train-brakes, and 27.23 per cent, with auto-
matic couplers.
Prior to the panic of 1873 all the car- works were
busy. That panic caused the failure of a large
number of new railroads, which, in turn, forced into
bankruptcy and eventual reorganization many car
companies. From 1873 to 1879 the car-shops
throughout the country were practically idle; but
with the revival of business in 1878-79 the car- works
again became busy, and, with the exception of a
slight dullness in 1883-84, did a large and profitable
business until 1893. The effect of the recent busi-
1 " Railway Car Journal," March, 1895.
2 These figures are only for cars built by companies re-
porting their output, and the statements, therefore, are com-
parative.
ness depression on car building may easily be seen
from the fact that in 1890, 103,000 freight-cars were
built by fifty companies ; in 1893 the output of forty-
three companies was only 51,216 cars ; and in 1894
the twenty-seven companies operating their plants
turned out 17,029 cars. Fifteen companies that
built 3000 freight and 300 passenger cars in 1893
built not a single car in 1 894.2 The seventh annual
report of the Inter-State Commerce Commission is
authority for the statement that the increase in the
total number of cars during the fiscal year 1 894 was
but 4132, as against 58,854 in 1893. With the re-
vival of business the car companies are again start-
ing up. The average life of a freight-car being from
fourteen to twenty years, at least 75,000 cars must
be built each year to repair the ravages of time ; be-
sides the cars required to make good the losses by
accidents and for the increase in mileage and busi-
ness.
The transportation of various kinds of products,
such as live-stock, dressed meat, oil, and timber,
has called into being cars especially adapted to each
class of freight, so that scores of different kinds of
cars are now constructed to answer the demands of
the shippers. Within the past year electricity has
been used as a motive power for both freight and
passenger cars, and possibly in the future each
freight-car will be equipped with an overhead trolley
whereby it can move independently of the train on
branch roads and for switching purposes. At all
events, if the future is to be judged by the past,
great changes in transportation are likely to come
suddenly, and to secure wide-spread adoption in the
minimum of time.
CHAPTER XVIII
AMERICAN SHIP BUILDING
THE revival of American shipping has been
scarcely more than a hope of the American
people for more than thirty years. By a
revival of this industry is meant the reappearance,
in frequent and constantly increasing numbers, of
American-built ships for our commerce with other
nations, rather than for our own internal or coast-
wise trade. This has been a theme, and more or
less a dream, for statesmen, capitalists, manufactur-
ers, and all patriotic citizens. All have recognized
that complete national independence without a mer-
chant marine proportionate to our standing as a
nation is impossible. All thoughtful citizens under-
stand that, so far as our foreign commerce is con-
cerned, we are to-day, as we have been for a long
time, practically in subjection to the trade impulses
of Great Britain. If England should place an em-
bargo upon us we should be practically helpless —
for a considerable time, at least — in our trade with
other nations. All agree that American shipping
should be revived. It is as to the best method of
reviving it that we disagree. There can be no
doubt that this disagreement has been a national
misfortune.
The creation of a new navy, or, strictly speaking,
the beginning of a new navy, and the recent build-
ing of two notable specimens of marine architecture
for the transatlantic trade, have caused many per-
sons to think, and a few to assert, that the revival has
come already. Every one wishes that this were
true. The fact is, these are simply indications of a
revival of this splendid art and trade. We have
shown most emphatically in the last ten years that
we can not only build ships equal to the best of
foreign construction, but actually superior to them,
ship for ship, in finish and in results. Moreover,
we have so wonderfully progressed in these ten
years that we can now actually build ships at only
a trifle more in first cost than the most progressive
of foreign ship builders.
Nevertheless we cannot say truthfully that Amer-
ican ship building has revived. As a people we
have risen to a height from which we can see the
promised land. We have yet to enter into it. Ex-
cept for the creation of this new navy, dnd for the
insistence of such men as Secretaries Whitney and
Tracy, of our Navy Department, that our war-ships
should be entirely of American make, notwithstand-
ing that at first they would cost more than if we had
them built in England, the ship-building industry of
this country for foreign trade would be practically
paralyzed to-day. The most, therefore, that can be
said is that we can now build our own ships, and
that manufacturers are ready at any minute to enter
upon the work. This of itself is a tremendous gain,
and is the first step — the one of greatest importance,
perhaps — toward the completion of our indepen-
dence of all other nations. The situation is, there-
fore, one of promise.
Ship building began in this country in the earliest
colonial times. It was fairly well established in
New England in 1640. It began on the Delaware
in 1683. The conflicts in Europe made it neces-
sary for the early Americans to build their own ves-
sels. The industry had its vicissitudes, like the col-
onists themselves, for a century. In 1 740, however,
New England had no less than 1000 sail in the
fishing trade. In 1770 Massachusetts built nearly
one half of the American ships. At the beginning
of the Revolution the American tonnage amounted
to 398,000. It comprised nearly one third of Great
Britain's entire tonnage. Philadelphia had then
come to be the leading center of the industry here.
The trade of this country was then largely with the
West Indies, and Philadelphia was a most accessible
port for the products of those islands.
In 1793 Philadelphia built double the number of
ships that any other place in the United States fur-
nished. In 1800 the tonnage of American shipping
was put down at 669,921. The War of 1812 caused
119
120
ONE HUNDRED YEARS OF AMERICAN COMMERCE
a sharp decline, but in 1815 there came a great re-
vival. It dropped in 1820, and recovered somewhat
in 1830. In 1835 it went lower than for any other
year of the century, but forthwith there came the
greatest time of prosperity in the industry, which
culminated in 1 8 5 5 . The tonnage for representative
years of these periods is recorded: 1820, 47,784;
1830,58,094; 1835,46,238; 1845,146,018; 1850,
272,218; 1855, 583,450.
Then came the decline for twenty years. It was
about as rapid as the increase for twenty years had
been. In 1855 we built 381 ships and barks, and
126 brigs. In 1875 we built 114 ships and barks,
and 22 brigs. In 1885 we built n ships and
barks, and no brigs. We built no steamers for for-
eign trade. The last census showed that there were
more than 1000 ship-building plants in the United
States. Most of them were small affairs. They
were occupied in building all sorts of craft for our
own waters, chiefly for the large landlocked com-
merce of our lakes, and, of course, scarcely enter,
so far as their product is concerned, into a consid-
eration of the revival of American shipping as it is
commonly understood.
There should be little need to recount the causes
for the decline in this country of this noble indus-
try. Nature intended us to be a seafaring people,
and for eighty years we were such. In the begin-
ning of this century we not only surpassed other
nations in the quality of our ships, but we could
build them cheaper than England could build her
vessels. We had splendid forests and hardy, fear-
less sailors. Year by year we increased our output
in this industry, so that when the decade from 1850
to 1860 was reached we were second in rank in this
industry, and in 1860 so close to England that there
was practically no difference between the two
nations. Soon after the year 1840, however, Eng-
land's forests had begun to show serious depletion.
It became necessary, after a time, for her to import
the greater part of her materials for building ships.
Tools were then invented for the working of iron
for ship building. She had plenty of iron in her
hills, and forthwith the iron ships began to appear,
slowly at first, but none the less surely and steadily.
There was no such incentive in this country for
iron ships, the feasibility of which had been demon-
strated for forty years or more. Our forests were
still plentiful and close at hand. Our experience
with wooden ships had been profitable. The indus-
try was increasing all the time. There was little
need for a drastic change in our system of manu-
facture. The gold fever was upon us, and the tide
of immigration was sweeping to our shores in a
mighty current. There was no time for any change
in our methods, even had we been inclined to make
one. From a fleet of 201,562 tonnage in 1789, we
had grown to a fleet of 5,353,868 tonnage in 1860.
In the latter year, the entire tonnage of the whole
British empire was only 5,710,968. Truly an im-
pressive showing was ours.
The Civil War came. For a time our shipping
showed no marked decline. Then it began to go
down. The Confederate privateers, built in Eng-
land, began to sweep the seas. American ships
with hundreds of thousands of tonnage sought the
English flag for protection. Year by year we built
fewer ships. When the war ended we had practi-
cally ceased to be a maritime nation. We were at
the threshold of a magnificent interior development
of our own country. Our capitalists could not begin
to furnish the money needed in this work. We
had to go to England, even as we have been doing
in recent years, to borrow money to build the in-
tricate and amazing network of our railroads. New
methods had come into the ship-building industry.
The business had become revolutionized. Eng-
land had taken full advantage of her opportunity.
She had fostered the industry by placing her govern-
ment work in private yards. Her plants had been
established on a broad scale, and a resulting cheap-
ening in cost of production had followed. The
United States was out of the race. Her forests
near the coasts were depleted. When we built our
first battle-ship, the New Ironsides, in 1 863, the tim-
bers used in her were cut within twenty-five miles
of Philadelphia. The great interior development of
the country had swept all such forest supplies away.
Labor was costly. This made the product of our
iron-mines most expensive, and as a people we found
that one of the results of the great Civil War was
the destruction of our shipping industry, and, de-
plorable as it well may seem, and not yet fully
understood by all our people, we were commercially
dependent once more upon Great Britain. The ris-
ing cloud of our internal prosperity hid this from the
eyes of most of our people, but fact it was and is
nevertheless.
England had become mistress of the seas. With
an eye single to her commercial interests — at once
the explanation of all her statecraft— she resolved to
maintain her supremacy. To-day she is as resolute
in her purpose as she was thirty years ago. Her
shipping is the sign whereby she conquers in the
mercantile world. It is the standing proof of her
national prowess and independence. With keen
CHARLES H. CRAMP.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
121
foresight she resolved that this conquering industry
should not become stagnant. She enrolled certain
of the steam-craft in the reserve force of her navy,
paying the yearly rate of twenty shillings per ton to
their owners. She established liberal subsidies for
carrying the mails. She recognized that a ship
carrying the British flag was something more than
the private property of the individual owner. The
nation had a share of ownership in every such
vessel.
Recognizing that this country could never have
complete national independence without a merchant
marine, American capitalists in 1870 decided to
make a start in bringing about a revival. Four
vessels were built for the transatlantic trade in the
Cramp shipyard. They were the Ohio, Indiana,
Pennsylvania, and Illinois. They were equal to any
vessels of their day, and a credit to the industry and
to the nation. England met their advent with in
creased subsidies. The American vessels had no
such aid, and had to fight their way in commercial
rivalry. It was not a winning fight. Ship building
here was confined thereafter to building coastwise
vessels. The industry sank to such a low stage that
when, in 1882, we started to build a new navy, the
English newspapers scoffed at the idea that we could
produce either hulls or engines. They finally ad-
mitted that we could build the hulls, but for us to
make the complex modern marine engine was out of
the question. Congress gave the Secretary of the
Navy power to get abroad what he wanted in this
respect, but Messrs. Whitney and Tracy resolutely
refused to take advantage of the privilege.
When we started in this work of building a navy
we had no mills in which to roll the plates, no
foundries to make the great castings, no forges to
fashion the shafts and gun forgings, no plants to
supply our armor. It had taken England thirty
years or more to equip herself with these appliances.
What have we done? In ten years, practically, we
have gone to the front. Our marine engines and
boilers are and for years have been confessedly the
best in the world. Not one of our new war-ships
has broken down when put to a test of four hours'
work at its maximum power, and none has been in-
jured in the slightest by such an enormous trial of
endurance. On the contrary, no English war-ship
has been equal to such a task. The English experts
freely admit that we have won supremacy in this re-
spect. Our ships are acknowledged to be superior
in finish. There is one simple explanation for this :
workmen in American shipyards get nearly double
the wages of workmen in English shipyards, and a
better-paid man always does better work. Our
designers have made distinct advances over their
English competitors. The Indiana class of battle-
ships proves this. With vessels only two thirds the
size of the English Royal Sovereign class, the Indiana
class has a greater fighting capacity and as much
speed and endurance. Moreover, the recent trial of
the Indiana herself demonstrated that she was a signal
success in the one respect where English ships fail
oftenest, the matter of stability. Lack of stability
has been the crowning fault of foreign battle-ships.
No steadier ships will float than these new battle-
ships of ours.
In addition to all this, we have produced the two
fastest war-ships of large size in the world, the Co-
lumbia and Minneapolis. England became aroused
by their appearance, and she answered our success
by ordering two vessels of stupendous dimensions,
the Powerful and Terrible, for the sole purpose of
outclassing them. The creation of this new navy
has stimulated ship building in many yards. On the
Pacific coast, in New England, in Maryland, even
on the Mississippi River, as well as on the historic
Delaware, we have proved our ability to compete
with all the world in the making of ships of every
kind. Our mills and forges and foundries cannot be
surpassed anywhere, and a striking triumph of our
skill is shown by the fact that Russia has recently
placed two orders for armor in this country, to the
exclusion of all the plants of Europe.
Our skill had become so thoroughly demonstrated
that three years ago American capital, encouraged
by legislation providing for a moderate compensa-
tion for carrying the mails, — much less than that
which England pays for the same work, — decided to
make another start in the revival of our merchant
marine. We admitted two vessels to American
register, — the New York and Paris, of the Inter-
national Navigation Company's line, — upon the ex-
press condition that two more vessels equal to them
in size and capabilities should be built in American
yards. Congress guaranteed a payment of $4 a
mile to these ships for carrying the mails to foreign
countries, upon the condition that they should show
themselves capable of maintaining a sustained speed
of twenty knots an hour. As a result of this the
St. Louis and St. Paul were built, and in October,
1895, the mail-carrying contract went into effect.
The St. Louis and St. Paul have shown, in the short
time they have been in service, their splendid worth ;
and the hearty reception given to them by the entire
country speaks well for the patriotism of the Ameri-
can people, and is of itself a most hopeful sign. The
122
ONE HUNDRED YEARS OF AMERICAN COMMERCE
St. Louis, on her official trial in Great Britain, made
an average of twenty-two knots an hour.
This, then, is the condition of our ship building
to-day. In ten years we have built, in round num-
bers, fifty most creditable vessels for the new navy,
and two fine specimens of ocean-going passenger-
craft. The reports of the Navigation Commissioner
show, as is pointed out by Mr. Chamberlain in an-
other chapter of this work, that, of the ten leading
countries of the globe, Italy and the United States
alone show a decline in this industry since 1875.
The tonnage of Great Britain for 1895 is placed at
27,885,806. That of Germany, now the second
maritime power, is 4,065,282. The United States
comes next, with a tonnage of 3,261,982, a decline
in twenty years of nearly 1,000,000 tons. In twenty
years Germany has increased her tonnage nearly
3,000,000 tons. Perhaps an incident in the experi-
ence of a young woman who several years ago made
a spectacular trip around the world for a New York
newspaper will illustrate the extent of the decline of
American shipping better than any set of figures.
The last instructions given to this young woman
were to make note of the number of times and the
occasions on which she might see the American flag
on vessels during her journey. When she came
back she reported that not once did she see a vessel
flying the American flag from the time she left New
York until she reached San Francisco. Nothing
more need be said, therefore, to show the complete
prostration of this industry, notwithstanding the fact
that we have built the nucleus of a new navy in ten
years, and are now in a position to build ships of any
kind and any speed within the limits of recognized
possibilities.
The great question, therefore, is, How shall our
merchant marine be restored? With no desire to
manifest a controversial spirit in these pages, I think
every one who has studied this question agrees that
national legislation of some kind is necessary. On
the one hand, some assert that the repeal of the navi-
gation law passed December 31, 1792, is necessary.
This act specifically closed American registry to
foreign-built ships, except those taken as prizes in
war. Its repeal would give us free ships. We could
buy vessels, if this act were removed from the statute-
books, at English prices. On the other hand, those
who oppose the repeal of this act assert that what
is needed is government aid similar to that which
England and most other nations give to their ship-
ping industries. These advocate the adoption of
one or all of three kinds of government assistance.
The first is special compensation to special lines of
steamships ; the next is a general bounty on tonnage
to all ships; the third is a liberal compensation to
our vessels, according to size and grade, for carrying
the United States mails.
Now, eliminating any question of partisanship in
discussing this matter, I think that no one will dis-
pute that probably the most powerful incentive to the
growth of the shipping of Great Britain has been this
matter of government aid. It will also be admitted
by all those who have examined the question histor-
ically that our law of 1792 was intended to promote
our national independence rather than to foster an
industry by a protective system. In those days the
industry needed no protection, because it was ad-
mitted, and had been proved beyond any doubt, that
we could build ships cheaper than any of our rivals.
In 1789, James Madison, then a member of the
House of Representatives, said that our capacity
for increasing the tonnage of our ships " gives us
a favorable presage of our future independence."
Moreover, there is conclusive proof that this navi-
gation law did not interfere with the growth of our
shipping. It has been in effect from the day it was
passed until now. When we were at the height of
our prosperity in shipping the law was in actual
operation, just as it is to-day, in the time of the
prostration of this industry.
It would seem, also, that we all ought to agree
that if this law were repealed these things would
happen : England, under our natural desire to buy
as cheaply as possible, would unload her poorest
vessels on us, and her shipyards would reap a bene-
fit in an enormous activity in building new vessels
for her own use. A new market would be opened
for the relief of the over-developed English ship-
yards, now sorely languishing because other nations
are beginning to build their own vessels. It ought
also to be admitted that in time of war England
would be able, by a series of sales easy to accom-
plish, to transfer her merchant marine to the Ameri-
can flag, and thus escape the terrible penalty that
must befall her in case she should enter into conflict
with any other nation. Her immense shipping is a
perpetual bond upon her not to engage in warfare.
If she could make an asylum of the American flag
temporarily she could resume control of her shipping
when hostilities were at an end.
As to the effect on the shipping industry of this
country, it is generally conceded that the repeal of
the navigation law would wreck the industry as at
present organized here. Those who favor this plan
see no reason why the government should foster any
single industry. Such vessels as England produces
ONE HUNDRED YEARS OF AMERICAN COMMERCE
she could build cheaper than we could build them.
The argument that our yards would be kept busy
with repair-work and building ships for the coast-
wise trade would fail, because repair-plants are of an
entirely different character from constructing plants.
If we could import ships for the foreign trade we
ought to have the same privilege for our coastwise
trade. A discrimination between the two kinds of
trade would be absolutely unjust to our mercantile
interests. Again, if we could get our ships at Eng-
lish prices, we should be confronted by the fact that
England, to retain her supremacy, would doubtless
continue to insist on her liberal policy of govern-
ment aid to her ships, and to hold her own would
probably increase that aid at once. It is difficult
to see how, under these circumstances, we could
compete with her in the commerce of the world.
By unloading her least desirable vessels on us she
would have better ships, and these, with favoring
legislation, would place us at once under a disad-
vantage.
It is for this reason that the advocates of govern-
ment aid have declared for a so-called bounty system
in this country. We use this system in our inland
commerce extensively. We pay large sums every
year to the railroads for carrying the mails. In that
case we call it a compensation. It is called a
" bounty " when we give such aid to ships. Why
should subsidies of land be given to the great
railroads and not to the ship-building interests ?
Enormous grants of land have been allotted by the
government to the great railway companies, and
these very roads, fattened on government patronage,
are now giving the preference of business at their
terminals to foreign bottoms, to the exclusion of
American ships, as is the case at Pensacola, New-
port News, New Orleans, and on the Pacific coast.
All the advocates of a general tonnage bounty, if
such a term is to be used, declare that within ten
years after the passage of such a law we should be
practically independent of every nation in the matter
of ships. Many such bills have been introduced in
Congress, but there seems little prospect at present
that any such law will be passed. Three years ago
we did adopt a scale of compensation for American
vessels carrying the mails to foreign countries. The
contract has just gone into effect. It requires from
two to three years to build ships such as the Sf. Louis
and St. Paul. The post-office authorities at first re-
ported that the new law seemed to have little effect.
By special legislation the New York and Paris were
admitted to American register, and now, for the first
time in our history, we are to have an actual trial of
123
the effect of this kind of government encouragement
of our shipping industry.
The system is to run for ten years. What the re-
sult will be time alone will tell, but this much can
already be said : it has added to our naval reserve
fleet four magnificent specimens of marine archi-
tecture, capable of immense use in time of war as
commerce destroyers. The money paid to them for
carrying the mails is much less than it would cost
us to keep actual war-ships of that grade in commis-
sion. It would take only a short time to equip them
as war-ships, and plans for that purpose have already
been drawn. If a general tonnage law cannot be
passed, we are assured of a fair trial of the mail-
carrying compensation system. Already in the build-
ing of the St. Louis and St. Paul it has had some
effect. It is doubtful if this system of itself will be
sufficient to restore the ship-building industry. The
fact that our capitalists are willing to try the experi-
ment is most encouraging.
If, however, the matter of government aid, as now
constituted, should fail, the future is not entirely
without hope. The period of enormous internal
development of our country seems to be ending.
Our railroads are practically built ; our mines are
developed. The time for amassing great fortunes
may be said to be past. Only in the line of the
development of real estate do opportunities for
making large fortunes seem to remain. In all
grades of mercantile interests there will be close com-
petition. Nevertheless the country has accumulated
a vast amount of wealth, and it is beginning to seek
investment. The fact of the appearance of the
St. Louis and St. Paul is proof of this. As time
goes on it must be that our wealth will increase.
As the margin of profits on present investments
grows less, new fields will be opened. If it can be
shown that a reasonable profit will follow investments
in ships, slowly but surely the industry will revive
without the stimulus of government assistance. This
must needs be a matter of extremely slow growth.
By the creation of a new navy our shipyards may
be kept in condition to build this new merchant
marine, if it shall come within a reasonable time.
Naval work alone, however, is not sufficient to re-
store our shipyards to complete efficiency. At best
there is very little profit in government work. It is
surrounded by such a system of slow and intricate
inspection and approval, of rigid rules and regula-
tions, that rapid work is impeded, and freedom to
make changes in the legitimate line of develop-
ment of the industry is prevented. Then, too, gov-
ernment work is intermittent in character. Although
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ONE HUNDRED YEARS OF AMERICAN COMMERCE
it is inadvisable to fix a set program of naval develop-
ment, owing to vast and constant changes that are
being made in this branch of warfare, it is a fact
that to keep the ship-building industry as at present
constituted at its fullest capability there should be
a steady and comprehensive advance movement in
adding to our fleets. The argument that it is not
the province of the government to stimulate any
single industry to the exclusion of another and to the
private benefit of individuals loses its force when
we consider that a merchant marine is necessary to
the commercial independence of any country with
extended sea-coasts.
It is a fact that cannot be disputed that so timid
is capital that it will not invest in ships unless the
flag they carry is assured of complete protection by
a navy. England's naval policy is to be interpreted
alone on these lines. A navy capable of maintain-
ing the dignity of a nation is not a constant menace
to peace. It is the best guaranty to the develop-
ment of commerce that any nation can give. It
means, under proper conditions, the prophecy of a
merchant marine. The steady development of a
well-defined policy in naval construction, therefore,
means the maintenance to a certain extent of ship-
yards which will be ready to build a merchant
marine as soon as there are war-ships in sufficient
quantity to protect it, and money and government
aid sufficient to start it.
Under present conditions, therefore, the future is
one of promise. It may be several decades before
our flag is even partially restored to the high seas.
The revival of our merchant marine must surely
come in time if we continue in the rate of prosperity
that has marked our development for the last thirty
years. It will come sooner if liberal aid is given
by the government. So complex are the subsidiary
industries in the present condition of building ships
that the revival will affect not only capitalists along
the coasts and elsewhere, but will employ a vast
army of men in the interior as well as along the
seaboard. The probable completion of the Nica-
ragua Canal will cause, undoubtedly, an immense
stimulus to American commerce. Whether those
who oppose the system of government aid on gen-
eral principles, owing to their views as to the proper
function of a nation, are right or not, is it not worth
considering if it would not be well for especial rea-
sons to be ready to carry this coming commerce of
the United States in American ships? Once started
on the road to prosperity, who that knows the char-
acter of the American people can doubt the result?
A fine specimen of marine architecture is always
a standing lesson in patriotism. It is required to
display the flag of its country. As it passes from
port to port it is more than a mere floating vehicle
for commerce. It is a bit of its nation's soil.
Around its existence and its journeyings the ro-
mance of travel and the dignity of nationality center.
No other manufactured thing is so complex or
delicate. It tells a story of national progress such
as nothing else can tell. It speaks of home to the
citizen in foreign lands. It means prosperity for
those at home and abroad ; for every vessel added
to the fleet of any nation means more commerce,
more trade. No patriotic citizen should relax his
efforts to secure a revival of this industry in this
country in some form or other. We have the mills,
we have the men, we are just beginning to have the
money, and we have the materials in rare abundance.
The situation calls for the wisest statesmanship, the
loftiest patriotism, the noblest effort.
CHAPTER XIX
THE TELEGRAPH
THE first real manifestation of telegraphy as
an applied art dates from just one hundred
and one years ago, and to Claude Chappe, a
Frenchman, is due the discovery of it and its possi-
bilities. It was a visual telegraph or semaphore
that Chappe invented, and for the better part of
a half-century afterward it was the only quick mode
for communicating at a distance that Europe knew.
An ingeniously contrived signal-code and perfected
mechanical appliances made this semaphore-tele-
graph not only most useful, but very rapid, a des-
patch traveling at the rate of from fifteen to twenty
miles a minute on the main lines. It was introduced
in France in 1794, and, after the populace had de-
stroyed the signal-towers several times, it was finally
completed in time for the first message sent over it
to be the thrilling news of a French victory. " Conde
is taken from the Austrians," came the signaled
words from the frontier within three or four hours
after the event, and Paris went wild. Chappe was
as great an idol as he had before been an object of
hatred, and his telegraph became the wonder of the
day. Europe followed France in 1802 in introduc-
ing Chappe's idea, and England shortly afterward,
in 1823, made use of it at home and in India. It
was, in fact, the common telegraphic system of the
world up to the time when the invention of the
electric telegraph upset all previous ideas of human
limitations.
The germ of the idea which came, in Chappe's
hands, to full development was first seen in the sig-
nal used by the Americans during the Revolutionary
War. This consisted of a barrel on the top of a
high pole or mast, on which was, furthermore, a
movable yard or arm to which a basket was attached.
To each of the different positions of this arm a
meaning was given, and signals could be sent many
miles by these means. While it is certain that
Chappe never saw this contrivance, the similarity of
its elementary design with that of his telegraph gives
them a direct connection. The semaphore-telegraph
was in use, with an elaborate system of signals, in
this country for many years prior to 1850. It was
the means for communicating news of incoming
ships from the Highlands of New Jersey to New
York, where the signal-tower was located in the
dome of the old Merchants' Exchange, now the
custom-house.
Before entering upon the detailed history of the
modern telegraph, a brief diversion will be necessary.
No fitting idea of the glorious successes it has at-
tained could be conveyed were the earlier discover-
ies and experiments in electrical phenomena to be
omitted. Electricity is to the telegraph as steam
to the motive engine or gravity to the universe — the
force that makes it possible. The discovery that
amber (from the Greek name of which the word
" electricity " is derived) became electrified under
friction is an old one, but the reduction of this dis-
covery to anything like scientific analysis or classifi-
cation only dates from about the middle of the last
century. In the list of those whose discoveries have
borne the most important relation to the develop-
ment of this wonderful science the names of Ameri-
cans are at the head. Europe reverences the glory
of Galvani, Volta, Oersted, Arago, Ampere, and
Steinheil, while England vaunts her Cooke, Wheat-
stone, and Bain ; but above them all are written
the names of Franklin, Henry, and Morse.
It was in 1747, the year after the discoveries
which developed the Leyden jar and the principle
of the restoration of electric equilibrium, that Ben-
jamin Franklin first interested himself in the phe-
nomena of electricity. A letter from Peter Collinson,
fellow of the Royal Society of London, to the
Literary Society of Philadelphia, of which Franklin
was a member, interested the latter, and he then
began by his reply that interesting series of letters,
continuing for many years, in which he laid down,
and later proved, so many propositions, since be-
125
126
ONE HUNDRED YEARS OF AMERICAN COMMERCE
come axiomatic, but totally at variance with the
accepted European theories of that day. In 1749
he declared electricity and lightning identical, and
in June, 1752, proved it by the celebrated kite sent
up during a thunder-storm. Franklin was succeeded
in America by Professor Joseph Henry, in after
years connected so prominently with the Smithsonian
Institute. At the time when this distinguished sa-
vant was commencing his researches, and just be
fore, great discoveries were being made in Europe.
Coulomb in 1785 laid the foundation of electrostat-
ics. Galvani, of Bologna, in 1790 discovered by
accident that metallic connection between the crural
nerve and the legs of a frog caused convulsive
action. He ascribed it to animal electricity, and
all the physiologists of Europe adopted his theory.
The electricians, however, doubted, and in 1800
Professor Volta, of Pavia, demonstrated beyond a
doubt that the effect produced was through elec-
tricity generated chemically. In proving this he
brought out the voltaic pile, which was the first the
scientific world knew of any electricity other than
static or frictional. On this discovery of Volta,
affording, as it did, a current electricity, together
with the subsequent discovery of electro-magnetism
by Professor Christian Oersted, of Copenhagen, in
1819, is based the electric telegraph of to-day. The
voltaic pile, to which improvements were early
made by Cruikshank, Daniell, Smee, Bunsen, Grove,
Chester, and by many others since, is the battery
of to-day ; and Oersted's electro-magnetism, in the
hands of Schweigger, Arago, Ampere, Sturgeon, and
finally Henry, has afforded the electro-magnets,
giving the principle on which were based the old
English deflecting-needle telegraphs and the present
Morse instruments.
These discoveries in electrical science, the latest
of which was in 1825, left the field free for the pio-
neer who should carry forth the telegraph. Many
had already essayed this honor, but the man and the
time were not yet in conjunction. So early as 1749
Franklin had sent a current through a long wire
across the Schuylkill, and in 1753 Charles Marshall,
of Paisley, Scotland, had proposed a telegraph with
a wire for each letter.
Among the many who have originated forms of
electric telegraph are an Englishman named Lo-
mond, who in 1787 is said to have operated a short
telegraph line on his front lawn ; Reizen, who in
1794 invented the illuminated-letter telegraph by
the application of the broken current; Salva, a
Spaniard, in 1798, who used electrified pith-balls;
Samuel Thomas Sommering, who in 1809 first
applied the current from the voltaic pile to tele-
graphing; Ronald, in 1816; Gauss and Weber, of
Gottingen, who brought out the magnetic-movement
mirror and glass in 1833; and Steinheil, who in
1838 discovered the " earth-circuit," which did away
with the previously supposed indispensable return-
wire to bring the current back to the battery.
Steinheil also invented a system of telegraphy, and
ran his wires on poles with insulated attachments.
Across the Channel, William Fothergill Cooke, hav-
ing invented a magnetic-needle telegraph in 1836,
associated himself with Professor Wheatstone the
succeeding year, and introduced his invention to
general use. The needle-telegraph in various and
improved forms, and Bain's electro-chemical tele-
graph, continued to be the ones used in England up
to a late date, and were supplanted by the Morse
system only when the latter became practically
universal.
Of the early telegraphers there is one whose
name, too nearly forgotten, had almost been written
before that of Morse on the roll of fame. This
man was Harrison Gray Dyar, and the evidence is
strong that so early as 1827 he had erected and
operated, upon a certain Long Island race-track, a
telegraph line strung upon poles with glass insula-
tors. This telegraph communicated signals by the
discoloration produced by the electric current upon
a piece of moving litmus-paper, which had been
previously moistened. Dyar used only frictional
electricity, and was therefore unable to attain
results so eminently successful as those of inven-
tors after 1835, who could apply the wonderfully
improved device of the Daniell cell in supplying
their current. An attempt made by Dyar to intro-
duce his telegraph to general use encountered intense
prejudice, and, becoming frightened at some of the
manifestations of this feeling, he left the country.
Meantime, while all these claims were advancing,
the one preeminently great invention was rapidly
maturing on this side of the Atlantic Ocean. In
1832 the transatlantic packet Sully, bound for New
York from Havre, had on board among her passen-
gers a distinguished historical painter named Samuel
Finley Breese Morse. In the long evening talks in
the passengers' cabin the subject of electricity and
the electric current was brought up one night. A
well-known professor of sciences, Dr. Jackson, made
the statement that an electric current would manifest
itself at the distant end of a conducting wire in-
stantaneously. The remark, made in the course
of conversation, impressed Professor Morse deeply,
and going to his state-room, he commenced work on
ONE HUNDRED YEARS OF AMERICAN COMMERCE
127
the application of this space-annihilating current to
the transmission of intelligence. Before the Sully
readied her dock the thing was accomplished — in
the inventor's mind, at least ; and certain drawings
and explanations made by him at that time, and
sworn to by the captain, were later produced before
the Supreme Court during the suits by which the
validity, scope, and priority of the Morse patents
were fully confirmed.
On landing, Professor Morse constructed his first
machine, making the type himself for his famous
alphabet, which stands to-day as the most wonder-
ful piece of cryptography ever devised. Lack of
funds was a great drawback to the inventor, both
at this time and for many years to come ; but in
November, 1835, he successfully exhibited his tele-
graph in a large room of the New York City Uni-
versity, transmitting a message through a long wire.
Among those who witnessed this first exhibition of
the electric telegraph were Leonard D. Gale, D.
Huntington, O. Loomis, and Robert Rankin. The
following year the invention was on public exhibi-
tion in New York, and in February, 1837, when
Congress passed a resolution requesting the Secre-
tary of the Treasury to report upon some method
of electric telegraphing, the claims of Morse were
strongly presented, and in April, 1838, the Commit-
tee of Commerce of Congress made a unanimous
report of the most favorable tenor upon the Morse
invention. The chairman of this committee, Hon.
Francis O. J. Smith, characterized Morse's telegraph
as the " most wondrous birth of this wonder-teeming
age." So impressed was Mr. Smith with the great
possibilities of the telegraph that he resigned his
seat as a member of Congress and purchased a
quarter interest in the Morse rights. The other
members of Mr. Smith's committee, whose names
appear signed to the unanimous and earliest indorse-
ment of the value of Professor Morse's discovery,
were S. C. Phillips, Samuel Cushman, John I. de
Graff, Edward Curtis, James M. Mason, John T. H.
Worthington, William H. Hunter, and George W.
Toland.
The recommendation of this committee to the
contrary notwithstanding, Congress refused to ap-
propriate the $30,000 asked by Morse to construct
an experimental line. Mr. Smith and Professor
Morse accordingly sailed for Europe to attempt its
introduction there. Their mission proved a failure,
patents being refused them in England on the
ground that a partial description of the Morse
system had been published. In France a patent
was issued, only to be withdrawn. Returning to
this country, Professor Morse received his letters
patent in June, 1840, based on the specifications of
his application in April, 1838. In 1842 he again
presented his invention before Congress, asking an
appropriation of $30,000. The House promptly
passed it (see report on the debate, p. 46 1 of Prime),
but the session dragged along and the traditional
delay of the Senate kept the bill from reaching a
hearing. On the last night of the last day of the
session, March 3, 1843, Professor Morse waited in
the Senate corridors until late in the evening, when,
believing his cause hopeless, he returned to his hotel
almost broken-hearted. Had he but known it, one
of the last acts of the Senate during the very last
hour was to take up the Morse appropriation.
Singularly enough, no dignified questioner arose to
ask for information concerning the bill, which would
have required time and so proved fatal to it, but it
was straightway passed, and early the next morning
the news was brought to Professor Morse by Miss
Annie Ellsworth, to whom the overjoyed inventor
then and there promised the honor, which she
afterward enjoyed, of sending the first message when
the line should be completed.
The condition under which Professor Morse
received the $30,000 was that he should use it in
the construction of a line of electric telegraph from
Baltimore to Washington. He immediately com-
menced work on this line ; but his early efforts were
wholly useless, owing to a serious mistake in his
plans. He projected a subterranean line, and for
this purpose two copper wires covered with cotton
and gum lac were drawn through a lead tube. A
deep furrow was then made with a heavy plow, and
the pipe laid as far as the relay-house, nine miles
from Baltimore. (See Cornell's account in the
" Biography of E. Cornell.") It was then discov-
ered that an earth-circuit was formed and the wires
refused to work. The greater part of the appropri-
ation having been thus unsuccessfully expended,
Professor Morse was in great trouble ; but finally,
by withdrawing all the wire from the miles of lead
pipe and stringing it on poles above-ground, the
line was completed in May, 1844, and on the zyth
of that month the first despatch, " What hath God
wrought ! " flashed over the wires from Washington
to Baltimore, being sent by Miss Annie Ellsworth,
as long before agreed. Professor Morse's manipu-
lating assistants at this trial were Mr. Alfred Vail,
who in 1837 had invented and patented a printing-
telegraph, and Mr. L. F. Zantzinger. The electro-
magnets used on this line weighed 185 pounds, and
for some time after this Professor Morse believed
128
ONE HUNDRED YEARS OF AMERICAN COMMERCE
that the wire used in winding them had to be of the
same size as that on the line itself. The present
fine-wired, compact, and portable electro-magnets,
weighing less than a pound, and allowing a man to
carry a telegraph office in his pocket, so to speak,
were not dreamed of at that early day. This line
was also opened with the primitive system of com-
bined circuits, as first proposed by Professor Morse
in obviating the difficulties arising from lost strength
in the current on long distances. He speedily saw
a better way to accomplish this result, however, and
in that same year began the experiments which in
1 846 were crowned with success, and developed the
short circuits and relays which made possible the
great main lines and uninterrupted communication
of to-day. In 1844 he also invented the "key"
which is still in use. Without attempting the purely
scientific and technical aspects of telegraphy, we
will study at more length the practical and utilitarian
application of it to the world of American business
and every-day affairs.
The experimental line opened from Washington
to Baltimore with the $30,000 appropriated by
Congress having proved practical, it was declared
ready for public business on April i, 1845. Alfred
Vail was the Washington operator, and Henry J.
Rogers occupied a similar position at Baltimore.
The tariff was one cent for four characters, and the
first four days saw just one message transmitted.
Thus did the American people welcome the facilities
of the electric telegraph. About this time Profes-
sor Morse offered his interest in the invention to
the government for the ridiculously low price of
$100,000. A brilliant Postmaster-General, how-
ever, who saw no value in the invention, saved
Morse the loss he was so willing to incur ; so other
means had to be resorted to in bringing it before
the public. The proprietors of the patent at this
time were Morse, Vail, L. D. Gale, and F. O. J.
Smith. The latter struck out alone, taking the New
England States for his field, while the other three,
having selected Amos Kendall, formerly Postmaster-
General under President Jackson, as their agent, took
the remainder of the country. Kendall devoted
himself particularly to the South and Southwest,
although it was early decided to have the first line
run from Washington to New York. In carrying
out this plan it was decided further that the first
link should be constructed from New York to Phil-
adelphia. The excitation of the public interest in
the undertaking, and the consequent raising of cap-
ital, were intrusted to Ezra Cornell and his brother-
in-law, O. S. Wood. These two opened a small
office on Broadway, where they set up their instru-
ments ; and having obtained with great difficulty
permission to run a short wire over the neighboring
roofs, they began exhibiting the telegraph. Interest
was roused but slowly, however, and capital was
apathetic.
The sum needed for the construction of the line
from New York to Philadelphia was $15,000, and
it was only after the greatest difficulty, and the
granting of two shares for every one paid for, that
it was finally raised. There were about twenty-five
subscribers, and to them was issued $30,000 in
stock, while another $30,000 went to the patentees,
making the total capital stock $60,000. The com-
pany was organized under the name of the Magnetic
Telegraph Company, and its line was completed
from Philadelphia to Fort Lee on January 20, 1846.
The first New York office was at 16 Wall Street,
and later it was moved to Post's Building, behind
the Merchants' Exchange. The first clerk was
Charles S. Bulkley, and messages had to be sent
across the river by messengers, either for delivery or
transmission. The attempt to cross the North River
by cable failed in this year. Later a detour of 105
miles, by which the line went up the Hudson and
crossed on high masts at Anthony's Nose, proved a
failure. Various attempts to lay a cable were made,
but success was not achieved until February 12,
1856, when S. C. Bishop, the New York manufac-
turer, provided an armored cable insulated with
gutta-percha. The Magnetic Telegraph Company
formally organized on January 14, 1846, by the
election of Amos Kendall, president ; T. M. Clark,
secretary ; A. Sidney Doane, treasurer ; and B. B.
French, John J. Haley, John W. Norton, John O.
Sterns, William M. Swain, and J. R. Trimble,
directors. The line was extended to Baltimore,
June 5, 1846, on an issue of $10,000 more stock,
and later to Washington. Its cash receipts during
the year 1846 amounted to $4,228.77. Six years
later, even with the handicap of competing lines, its
annual receipts amounted to $103,641.42, which
indicates the increasing public favor shown to the
telegraph.
In the decade that followed 1845 and the first
telegraph, companies started and wires ran over the
country at an almost magical rate. Henry O'Reilly,
one of the most energetic promoters and builders
this continent ever produced, started westward,
leaving his lines of wires behind to mark his course.
From Philadelphia to Pittsburg he ran the Atlan-
tic and Ohio Telegraph Company, capitalized at
$300,000, and completed December 29, 1846.
THOMAS T. ECK.ERT.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
129
From Pittsburg to Louisville he built, in 1847, the
1'ittsburg, Cincinnati, and Louisville Telegraph
Company's line. It was over this wire that, in 1847,
using a House machine, O'Reilly sent the first
despatch ever transmitted by the printing system.
Still further did O'Reilly go, notwithstanding the
fact that a bitter legal battle was raging between
himself and F. O. J. Smith for the Morse patentees,
who claimed O'Reilly had infringed on their rights.
From Louisville he boldly struck out for New
Orleans via Nashville, and with a branch to Mem-
phis. This line was incorporated as the People's
Line, and was completed in 1849 ; but it was unsuc-
cessful from the start, and nearly ruined O'Reilly.
It was later consolidated with the Ohio and New
Orleans Telegraph Company; the two organized,
January 6, 1860, as the Southwestern Telegraph
Company, which was absorbed by the American
prior to that company itself being taken in by the
Western Union. Among the other early telegraph
lines were the following:
EARLY AMERICAN TELEGRAPH COMPANIES.
NAME.
DATE OF
ORGANIZATION.
New York and Boston Magnetic Telegraph Co. 1845
New York, Albany, and Buffalo Electro-MagneticCo
Lake Erie Telegraph Co 1847
New York State Printing Co. (House line)
Ohio and Mississippi Telegraph Co 1848
St. Louis and New Orleans Telegraph Co 1848
New York State Telegraph Co. (Bain line)
New York and New England Telegraph Co 1849
American Telegraph Co
Illinois and Mississippi Telegraph Co 1849
Erie and Michigan Telegraph Co 1848
New York and Erie Telegraph Co 1849
Cleveland and Cincinnati Co
Maine State Telegraph Co 1847
Vermont and Boston Telegraph Co 1848
New York and Washington Printing Telegraph Co.. 1848
North American Telegraph Co. (Bain line) 1848
Washington and New Orleans Telegraph Co 1846
Western Telegraph Co 1848
Ohio, Indiana, and Illinois Telegraph Co 1849
St. Louis and Missouri River Telegraph Co 1850
Northwestern Telegraph Co 1856
Western Union Telegraph Co 1851
These companies, with the branch lines repre-
sented by them, comprised the bulk of the capital
invested in the telegraph of the United States prior
to 1855. The Magnetic Telegraph Company, as
the oldest and for many years one of the most suc-
cessful, was the first to perceive how essential uni-
formity was to an economical and at the same time
improved service. Under President William M.
Swain this company made many advances and also
many concessions to other companies to bring about
this condition of affairs. To several of the Western
and Southern lines it leased wires, thus allowing
them to compete for through business. To give
itself equal opportunities it leased the Washington
and New Orleans lines in 1856, the Western Tele-
graph Company's lines, including the Marietta and
Cincinnati branch, in 1858, and, under the Supreme
Court decision upholding the Morse patent rights as
against the Bain electro-chemical telegraph, it ab-
sorbed the North American Company.
The second great seaboard line and power for con-
solidation was the American Telegraph Company,
with the history of which the greatest telegraphic
undertaking ever known— the transatlantic cable-
is connected. In 1850 some thoughtful writer
pointed out that St. Johns, Newfoundland, being
the port for the speediest arrival of European steam-
ships, ought to be the center for the telegraphs of
America, in order that the earliest foreign news
should be obtained. Acting on this hint, Mr. F. N.
Gisborne in 1851 incorporated the Newfoundland
Electric Telegraph Company. A short cable was
brought from England, but the attempt to lay and
operate it was unsuccessful. In 1854, Mr. Gisborne,
having sunk all his property in the venture, came to
New York seeking capital. He was introduced to
Cyrus Field and laid the proposition before him.
Field not only grasped the idea, but he carried it
further— to its very end, in fact ; and then and there
he determined that the transatlantic cable should be
laid. He interested in the project his friends Peter
Cooper, Marshall O. Roberts, Chandler White, and
Moses Taylor, and on May 6, 1856, the New York,
Newfoundland, and London Electric Telegraph
Company was incorporated, with a capital of
$1,500,000. Both this government and that of
England made valuable concessions and grants to
the company.
In 1856 the cable to Newfoundland was success-
fully laid, and October 3ist of that same year the
first transatlantic cable was ordered from Messrs.
Newall & Company, and Glass, Elliott & Company,
of London. This cable was composed of seven
small twisted copper wires, surrounded by gutta-
percha covered with tarred hemp, and inclosed in
an iron armor of eighteen cords of small wire.
During this year the U. S. S. Arctic and H. M. S.
Cyclops took soundings along the proposed route for
the cable. The United States and England each
placed two vessels at the disposal of the company
for the purpose of laying the cable. The United
States ships were the Niagara, carrying one half the
length of cable, and the Susquehanna, which acted
as a tender. The English ships were the Agamemnon,
having the other half of the cable, and her consort,
the Leopard, acting as a tender. The shore end of
130
ONE HUNDRED YEARS OF AMERICAN COMMERCE
the great cable was landed from the Niagara at
Ballycarberry Strand, in Valentia Bay, Ireland,
August 5, 1857, and two days later the fleet started
slowly away for the distant shores of Newfoundland.
The first three days all went well; but on the nth,
late at night, there was a sudden jar and shock, and
the cable was found to be broken. Three hundred
and eighty miles of it had been laid. The fleet
returned to England, and the remainder of the cable
was stored at Keyham docks for the winter. More
cable was provided, and on the loth of June the
succeeding summer the same little fleet left Plym-
outh, this time for mid-ocean, it having been deter-
mined to start both ships, paying out simultane-
ously. This plan was tried, and twice the cable
parted before more than a short distance had been
traversed. The third time 142 miles were paid out
before a break finally occurred. This time the ves-
sels failed to meet each other, and so returned to
Plymouth. Having thus got together again, a last
attempt was determined upon, and on July 2gth it
was made and was successful. Almost simultane-
ously the two vessels reached the shore and landed
the cable, on the afternoon of August 5th, the
Niagara at Trinity Bay, Newfoundland, and the
Agamemnon at Valentia Bay, on the Irish coast.
Two thousand and thirty-six miles of cable had been
laid, and on August i6th the first message was
flashed under the ocean, from the Queen to the
President of the United States. From the first this
cable suffered from defective insulation, and amid
world- wide grief it finally gave out, September ist,
after having grown steadily weaker from the moment
it was first tested.
The connection of this the first transatlantic cable
with the inception of the American Telegraph Com-
pany may not at first be seen ; but it is direct,
nevertheless, and to one who knew the late Cyrus
Field and his character, it should be clear. Mr.
Field from the first believed fully in his cable pro-
ject, and, so believing, he was far-sighted enough to
recognize the importance of a system of land tele-
graphs connecting the cable with the great centers.
For this reason, when David E. Hughes, who had
just invented an excellent printing- telegraph, was
introduced to Mr. Field's notice, that gentleman
was easily induced to purchase the idea, and despite
the fact that the transatlantic cable was still high
and dry ashore, he secured the incorporation of the
Boston and New York Printing-Telegraph Company.
Besides this company others were organized at this
time, notably the East and West and the Troy and
Boston. The Commercial Printing-Telegraph Com-
pany gradually replaced these, and when the Amer-
ican Telegraph was incorporated, May 30, 1858,
with $200,000 capital, it had no difficulty in leasing
this latter, together with other Eastern lines, such
as the Maine State Telegraph Company. The ex-
tension of the American Telegraph Company from
this time was rapid, and in 1865, when the Great
Eastern made the third, and unfortunately fruitless,
attempt to lay a cable, this company controlled
nearly every line on the seaboard east of the Hud-
son. On July i, 1866, its $4,000,000 capitalization
being replaced by an issue of $12,000,000 of West-
ern Union stock, the American was quietly absorbed
into that company.
Scarcely a month and a half later, on August
1 6th, the Anglo-American Telegraph Company, the
successor of the various other cable companies, suc-
ceeded in laying a cable from the Great Eastern
which has worked ever since. The failure of the
attempt made by the same ship the previous year
was also mitigated shortly after this by the suppos-
edly lost cable being found, grappled, brought up,
spliced, and successfully laid.
These momentous events in the story of trans-
oceanic telegraphy were being duplicated on land,
however. Five years before the cable of 1866 was
even wet by salt water a transcontinental telegraph
line was flashing the stirring news of that warlike
time from Washington to San Francisco. Hiram
Sibley is the man to whom much of the credit for
the accomplishment of this great feat is due. So
long before as 1857 he had become possessed by
the idea of the feasibility of this undertaking, and
had proposed it to the directors of the Western
Union Company. They were conservative, and a
transcontinental telegraph was no light thing in those
days. Nothing discouraged, Mr. Sibley laid his idea
before Congress, and obtained from that body in
1860 not only indorsement, but liberal concessions
as well. Armed with these, Mr. Sibley secured the
cooperation of the Western Union, and the Pacific
Telegraph Company was organized. The California
State Telegraph Company, learning of the plan,
agreed to take a share in it, and a company was
organized there to build the line as far as Salt Lake
City, which was to be the Western end of the East-
ern constructors. Everything seemed propitious, and
work was begun.
The public fully expected that two years was the
minimum time in which the line could be completed,
and many well-informed people believed it would
take longer. The surprise of the country can be
imagined, therefore, when just four months and
ONE HUNDRED YEARS OF AMERICAN COMMERCE
181
eleven days from the time work was commenced the
lines met and were joined at Salt Lake City, and
the first through message sent. This was November
15, 1 86 1. Since then the telegraph across, around,
lengthwise, or breadthwise of the land has stretched
its threads of steel. The blank refusal with which
the New Jersey Transportation Company met the
request of grim old Amos Kendall to run the first
wires of the Magnetic Telegraph Company along
their roadway was modified a year or two later,
when the Baltimore and Ohio Railroad granted the
first of such permissions ; and to-day the railroad
and the telegraph are seen to be inseparable. The
insignificant sum — less than $5,000 — which repre-
sented the first year's receipts of the old Magnetic
Company has grown to dimensions where even mil-
lions have to be reckoned in hundreds.
Prior to 1866, the year that saw the transconti-
nental line opened, the many companies and small
lines divided the business of the country into so
many channels that the totals are not obtainable.
The advance of system and uniformity through
consolidation brought comparative order out of this
confusion, and in 1866 figures were made up giving
the total wire mileage of the American telegraphs as
75,686, covering an actual line distance of 37,380
mated for the country at large. There were 92,909
people employed in the telegraph business by all the
companies.
In the year ending June 30, 1895, the figures for
the Western Union Company had reached dimen-
sions scarcely conceivable as the result of a single
half-century's improvement. From a total wire
mileage in 1883 of 462,283, it had increased nearly
100 per cent., the total in 1895 being 802,651 miles.
These wires represented a line length of poles and
cables of 189,714 miles, joining in one complete and
organized system of communication 21,360 offices.
The number of messages transmitted during the year
was 58,307,315, or forty per cent, more than in
1883. The expenses of the company in transacting
this business were $16,076,629, leaving a profit of
$6,141,389. This return for one year's business is a
wonderful contrast to that modest little sheet which
set forth the first annual balance of the old Magnetic
Telegraph Company. The gradual advance by
which this tremendous volume of business has been
rendered possible is best shown in the following
table, giving the mileage of lines operated, number
of offices, number of messages sent, receipts, ex-
penses, profits, and average tolls and cost per mes-
sage, for selected years since 1866.
WESTERN UNION TELEGRAPH COMPANY, 1866 TO 1895.
MILES OF
AVERAGE
AVERAGE
YEAR.
POLES AND
OFFICES.
MESSAGES.
RECEIPTS.
EXPENSES.
PROFITS.
TOLLS PER
COST TO Co.
CABLES.
MESSAGE.
OF MESSAGE.
1866
«88o
75,686
2.2SO
1870....
54,109
112,191
3,972
9,157,746
$7,138,737.96
$4,910,772.42
$2,227,965.54
75-5
5'-2
1875....
1880. . . .
85^45
179,496
233-534
6,565
9,077
17,153,710
29,215,509
9,564,574.60
12,782,894.53
6,335414.77
6,948,956-74
3,229,157.83
5,833,937-79
54
38-5
35-2
25.4
1885....
1889...
1895 ...
147,500
178,754
189,714
462,283
647,697
802,651
14,184
18470
21,360
42,096,583
54,108,326
17,706,833.71
20,783,194.07
22,218,019.18
12,005,909.58
14,565,152.61
16,076,629.97
5,700,924.13
6,218,041.46
6,141,389.21
32.1
31.2
3°-7
24.9
22.4
23-3
miles. There were 2250 telegraph offices open. By
1870 the figures had increased to 112,191 miles of
wire, 54, 1 09 miles of line, and 3972 offices, which were
doing a business annually of 9,157,646 messages.
The year 1880 found an equally marked gain. There
were 253,534 miles of wire, 85,645 miles of line, and
9077 offices, while the number of messages annually
transmitted had increased to 29,216,509. Six years
later and the growth was astounding in its rapidity :
217 telegraph companies existed throughout the
country, 20,899 offices were ready to receive or
transmit messages, and 671,002 miles of wire, cov-
ering 226,308 miles of line, were at the service of
the operators. Of this great total the Western
Union Company was the chief quantity; 462,283
miles of its wires were included in the 671,002 esti-
The aggregate assets of this company are $125,-
966,171, and the capital stock outstanding is $95,-
370,000, of which $550,000 was added during the
last year for the purchase of the lines and property
of the American Rapid Telegraph Company.
To these statistics, in estimating the whole im-
portance of the telegraph in the United States,
must be added the business done by the Postal Tele-
graph-Cable Company, and a few small telegraph
systems in various parts of the country. I have at
hand no particulars of the amount of that business,
but it would, perhaps, be fair to say that the total
telegraph receipts in the United States for the year
1895 amounted to about $25,000,000.
The important part played by the telegraph in the
development of the world's commerce is so self-
132
ONE HUNDRED YEARS OF AMERICAN COMMERCE
evident as to need little demonstration. Facilities
for rapid transit such as we have to-day both on
land and water would of themselves have accom-
plished much, it is true, but they would surfer a serious
diminution of their usefulness were the vastly more
rapid transmission of intelligence impossible. A
grain broker in Chicago who had only the railroads
and the Atlantic liners as carriers for his queries
and the return information would be obliged to
wait two weeks at the very least before he could
hear from London. Business methods to-day pro-
hibit such delays. The buyer in California must
have instant communication with his New York
house, which in turn must be equally well aware of
what its foreign agents are doing. The telegraph
and the cable permit this. In 1840 the total exports
and imports of the United States amounted to but
$221,927,638. The year the first telegraph line
was built, and a year later, showed the totals even
less, $219,224,433 being their estimated amount.
Since then, while each decade has seen improvement
except the one which included the disastrous Civil
War, the subjoined summary will show the added
impetus given to commercial enterprise, first in the
decade between 1845 an<i I^55i when the telegraph
lines of the country sprang into prominence, and
secondly in the period between 1865 and 1875, when
the transatlantic cable became of every-day use.
EXPORTS AND IMPORTS, 1845 TO 1895.
YEAR.
TOTAL EXPORTS
AND IMPORTS.
'§45 $219,224,433
1855 476,718,21 1
l8,65 404, 774,883
"ZS 1,046448,147
'°85 1,319,717,084
I894 1,547,135,194
These figures, significant though they are, still fail
to show the greatest benefit accruing from the tele-
graph. This is in the money it saves. Every cause
and every happening that affect the community, its
business, its crops, its affairs, are instantly communi-
cated to the farthest comer of the earth. Nothing
need come as a surprise. The distant dealer is as
well posted as the trader on the ground, and he oper-
ates accordingly, with an intelligence that saves mil-
lions every month. All this is in addition to the
advantages obtained in social and family life through
it, as well as in those occupations which are not
primarily commercial.
Twenty-five billion dollars are to-day represented
by the internal commerce of this great nation;
$1,500,000,000 more are included in our trade with
foreign lands ; a merchant marine with a carrying ca-
pacity of 3,261,982 tons now flies our flag ; railways
with a mileage of nearly 180,000, or one half the total
mileage of the world, gridiron our continent ; and a
population more prosperous and more enterprising
than that of any other country or time is pushing
steadily onward. All these have come to fruition
since the birth of the telegraph. With their advent
and growth that of the great telegraph system of
the United States is inseparably linked by the inter-
dependence of a common cause and effect. Each
has rendered the other possible. The end, however,
is far from being reached ; and when the wonders
which one short century has worked are consid-
ered, the futility of setting limits to the progress of
the future is but too apparent. The movement is
all in advance, and daily improvements testify to
its earnestness ; but its ultimate results I must leave
to others the chronicle.
CHAPTER XX
THE TELEPHONE
THE word " telephone " in its original use was
not applied to the transmission of speech by
the use of the electric current. The word is
much older than the art to which it is now exclu-
sively applied. To an exhibition of the transmission
of musical vibrations through solids, given by Wheat-
stone as early as 1821, he gave the name of "tele-
phone concerts," and certain kinds of trumpets for
signaling, used as early as 1845, were called tele-
phones. Indeed, the name was at one time applied
by the Germans to the common speaking-tube.
The effort to transmit sounds, and especially musi-
cal sounds, suggested the possibility, and perhaps
encouraged the hope, of the transmission of articu-
late speech beyond the limits to which it may be
transmitted through the natural medium of its
propagation, the air ; but the hope was not realized
until the invention of Bell, described in his patent
of March 7, 1876. In that patent were described
and claimed a method of, and apparatus for, trans-
mitting sound by means of an undulatory current
of electricity. " This invention solved the problem,
long labored upon by inventors and scientific men,
of the transmission of human speech by the use of
the electric current, and laid the foundation of the
art of speaking-telephony, since widely introduced
throughout the world."
In 1836, Dr. Charles G. Page, of Salem, Mass.,
an examiner in the Patent Office and an electrical
inventor of note, while employing a rapidly inter-
rupted electrical current produced by the ordinary
vibrating spring-tongue circuit-breaker, found that
if this intermittent current was passed through the
coils of an electromagnet the latter gave forth a
musical note the pitch of which corresponded to the
rapidity of the interruptions; the law of acoustics
being that after air-vibrations have become rapid
enough to blend together as a continuous musical
sound, an increase in their number per second raises
the pitch of the sound. He published this discovery
under the name of "Galvanic Music." Although
not utilized in the speaking-telephone, this served to
attract the attention of many experimenters to the
electrical production of sound.
In 1854, Charles Bourseul, of the French tele-
graphic service, suggested that the circuit-breaking
tongue or plate might perhaps be vibrated by the
air-waves produced by the voice of a speaker.
Would the resulting sound at the distant receiver be
articulation? He inclined to doubt it; but he said
that our knowledge of the precise nature of articulate
sound was too meager to enable us to answer that
question a priori, and the subject was worth experi-
ment. In the same year, " Didaskalia," a periodical
of Frankfort-on-the-Main, published an abstract of
Bourseul's article, and Philip Reis, a schoolmaster
who lived at Frankfort-on-the-Main, then took up
the subject. For his circuit-breaking transmitter he
used the membrane diaphragm of the old lover's
telegraph or string-telephone, so mounted as to make
and break the circuit once at each vibration. For
his receiver he employed Dr. Page's singing-magnet.
He hoped to transmit speech, and his efforts at-
tracted much attention. But he found that musical
sounds or confused noises were all that came from
his receiver, and in 1863, having perfected his in-
strument, he put it on the market as a musical
telephone.
Reis's discoveries contributed nothing toward the
speaking-telephone, unless it be the suggestion that
the diaphragm of the lover's telegraph might be em-
ployed as a part of an electrical apparatus. Reis
attracted attention to the subject, however, though,
on the other hand, the failure of both Bourseul and
himself after ten years of experiment must have been
very discouraging to others. In 1862 Helmholtz
published his great work on sound. In this he
showed, by direct experimental proof, that each
articulate sound was a composite, made up of a
fundamental or principal tone which gave volume
133
134
ONE HUNDRED YEARS OF AMERICAN COMMERCE
and pitch to the whole, while the peculiar character,
or, as it is technically called, " quality " or " form,"
which distinguishes one articulate sound and its air-
vibrations from another, is due to the admixture of
a considerable number of much feebler tones, called
" overtones," of successively higher and higher pitch.
These materials — namely, the discovery by Helm-
holtz of what articulation is, and the proof by the
experience of Reis that the only plan thought of for
its transmission was a failure — were needed for the
creation of the speaking-telephone. But they had
been widely known for a dozen years without lead-
ing to that invention, when Alexander Graham Bell,
son of an Edinburgh professor of articulation, and
himself a teacher in Boston of articulation to deaf-
mutes, brought them to bear with success on this
problem. In his patent of March 7, 1876, Mr. Bell
stated the well-known fact that an intermittent cur-
rent, such as would be produced by a circuit-breaker,
would reproduce musical pitch. Then he showed
that a current which, instead of being interrupted,
was caused to vary as sound-waves vary, could
transmit and reproduce every kind of sound which
sound-waves could convey, including vocal sounds
and the utterances of the human voice. He denned
this current as a current consisting of " electrical un-
dulations, similar in form to the vibrations of the air
accompanying said vocal or other sounds," whence
it took the short name " undulatory current."
An early and noteworthy public exhibition of
Bell's telephone was made shortly after the granting
of the patent, before the judges at the Centennial
Exhibition. One of these judges, a man of the
highest scientific repute, Sir William Thomson, now
Lord Kelvin, speaking to a fellow-scientist on
the evening of that day, said of Professor Bell's
invention, " What yesterday I should have declared
impossible I have to-day seen realized." And
later, addressing the British Association, after de-
scribing the telephone, he said, "Who can but
admire the hardihood of invention which devised
such very slight means to realize the mathematical
conception that, if electricity is to convey all the
delicacies of quality which distinguish articulate
speech, the strength of the current must vary con-
tinuously, and, as nearly as may be, in simple pro-
portion to the velocity of a particle of air engaged
in constituting the sound?"
Bell's improved instrument, which was put into
commercial use early in 1877, still remains the most
perfect articulator in the world. But as all the
electricity employed in it is such as the mere force
of the voice itself generates,— the current so pro-
duced is usually reckoned as not over 1 0 <}0 0 0 part
of that employed on an ordinary telegraph line, — its
sounds are feeble, its effects easily drowned out by
disturbances, and the instrument is therefore not
well fitted for ordinary commercial use as a trans-
mitting-telephone, where the listener is in a noisy
place, and the earth below and a network of neigh-
boring wires are full of other and more powerful
currents.
On April 14, 1877, Mr. Emile Berliner filed in
the Patent Office a caveat, and on July 20, 1877,
Mr. Edison filed an application, each of which de-
scribed what we now know as the speaking-micro-
phone. In this instrument the voice, acting to vary
the pressure between two electrodes in contact with
each other, molds the flow of electricity from a
battery into Bell's undulatory, speech-bearing cur-
rent. The microphone of Berliner, with the addi-
tion of carbon contacts, the value of which, as dis-
tinguished from metal contacts, was first discovered
by Edison, has become the universal transmitter of
the world. These inventions have been chiefly used
in the United States in the form of the Blake trans-
mitter, an instrument of beautiful organization and
construction, devised in the summer of 1878 by
Mr. Francis Blake, then, or not long before, in
charge of the electrical determination of longitudes
for the government. The receiving-telephone, made
by Mr. Bell in 1877, still remains the preferred in-
strument for that purpose.
The telephone was naturally first used over a sin-
gle wire connecting two stations ; but the possibility
of a wider use was immediately perceived, wherein
a number of such wires, practically unlimited, should
be so connected together that a person at any station
of such a system could hold conversation with per-
sons at any other station, and the " exchange " arose.
The exchange was, naturally, at first confined, or sub-
stantially confined, to the municipal limits of single
cities or towns. It spread rapidly, until in 1884
there was an exchange in every town or city of
10,000 inhabitants or over in the United States,
and of course in many towns of smaller population.
The connection of neighboring exchanges with one
another by trunk-lines, whereby the subscribers in
either exchange could talk with the subscribers in
any other exchange of the group, naturally followed,
and this in an ever- widening circle, until in 1892 it
had become possible for the subscribers to the ex-
changes in the city of New York to talk with the
subscribers to the exchanges in Chicago, and a little
later the system of exchanges in New England was
connected with New York, and thence to Chicago.
JOHN E. HUDSON.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
IH
The line from New York to Chicago was formally
opened to the public on the i8th of October, 1892.
The connecting of these cities, and the furnishing of
apparatus for personal conversation between them,
was such an addition to the facilities of business as,
by a sort of common consent, to be recognized as a
matter of public concern, and the formal opening
was made by a conversation between the mayors of
the respective cities.
As exchanges have grown and lines have been
extended, new questions have suggested them-
selves and new difficulties have arisen. At the out-
set, and for a considerable time thereafter, one wire
only extended from the central office to the premises
of each subscriber, the ground being used to com-
plete the electrical circuit, as in telegraphy. But
this opened the door to an amount of interference
from other currents, — the earth-currents, so called,
and currents like those from electric cars, discharged
into the earth, — which, owing to the extreme delicacy
and sensitiveness of the telephone, seriously impaired
the service, and often rendered conversation impos-
sible. This difficulty has been overcome by the use
of metallic circuits ; that is, by using two wires to
connect the central office with each subscriber's prem-
ises, and ceasing to use the ground as a "return."
It was found, however, especially in the longer
lines, that when a number of wires were strung on
the same poles, or when such wires were paralleled
by wires carrying electric light or power currents,
there were produced — by a subtle sympathetic effect
called induction — certain disturbances which con-
fused the speech and often rendered it unintelligible.
This was overcome by changing the relative posi-
tion of the wires in different parts of the line. As
has been explained, each circuit consists of two
wires. On each line of poles are a number of cir-
cuits. At certain measured distances, determined in
accordance with rules deduced from theory and
from experiment, each wire crosses over and changes
places with the others. The plan is that just as
much as one line influences another to generate
these counter-currents on one part of the route, just
so much shall another part of the same line influence
another part of that same other line to generate
counter-currents, but in a different direction, so that
these " induced " currents shall exactly neutralize
and destroy one another. If one will endeavor to
think out how, in a long line of fifty or a hundred
wires (for some of the larger routes carry that
greater number on the poles), each wire can at fre-
quent intervals be so transposed that each line shall
thus, by balancing, protect every other one, and
shall be itself protected from every other, some idea
of the difficulty of hitting upon a perfect plan will
be realized. When wires are made up into cables
the same result is obtained by twisting each pair of
wires together, and then " laying up " these twisted
pairs according to a rule which has been carefully
studied out to accomplish the desired result.
There was still another difficulty, experienced on
long lines especially. The telephone transmitter
produces in that part of the line where it is situated
Bell's speech-carrying variations of current. These
consist of alternate increases and decreases of cur-
rent exactly corresponding to the ever- varying sound-
waves ; and when these act upon the receiver the
spoken word is reproduced. These changes, neces-
sary for articulation, corresponding to what are called
overtones, succeed one another, in telephony, at the
rate of, say, 2000 to the second. Now it is found
in a long line that this change of electrical con-
dition takes place at the distant end with a cer-
tain sluggishness, so that before there has been time
for an increase to fully manifest itself there, the suc-
ceeding diminution comes along. Thus the rise and
fall of current at the end of a long line becomes so
insufficient or so inaccurate that the spoken words
are not clearly heard. This difficulty, which is due
in part to other causes, is known as "retardation."
In underground lines, as formerly constructed, the
difficulties from both induction and retardation are
increased from fifty to one hundred fold for equal
distances. To meet the trouble from retardation
the character of the lines must be changed, and
this has been done.
What the change should be was by no means a
simple matter to determine. Diminishing the sur-
face area of the wire per unit of length lessened the
evil of retardation, other things being equal. But
when a smaller wire was used other things did not
remain equal, because the smaller wire would not
carry as much electricity per unit of time, and this
aggravated the trouble. Proximity of the wires of
one circuit to other wires increases the evil ; close
proximity of the wires to the earth enormously in-
creases it. Wrapping the wires with any of the
usual insulating coverings increases it. But the
wires cannot be far apart on pole lines, and in a
cable the wires must be embedded in an insulator,
must be packed closely together, and must be laid
under water or underground. The capacity of iron
to become magnetized also unfitted it for use in
telephony. Balancing all these evils, advantages,
and necessities, the plan adopted has been to em-
ploy metallic circuits,— that is, two wires for each
136
ONE HUNDRED YEARS OF AMERICAN COMMERCE
set of instruments,— to use copper as the material,
and to take very large wire for aerial or overhead pole
lines, but, on the other hand, decidedly small wire
for cables. The size of the wire for overhead lines
varies with the length of the line. Thus, while the
copper wire used between New York and Boston
weighs 172 pounds to the mile, wire weighing 435
pounds to the mile is used between New York
and Chicago, so that each of the several metallic
circuits uniting Boston with Chicago contains more
than a million pounds of copper.
As wires have multiplied there has been a strong
public demand that they should go underground, at
least in the more thickly settled portions of the larger
cities. A beginning on underground work was made
in 1884. On the ist of January, 1885, there were
1225 miles of wire underground, and on the ist of
January, 1895, 149,592 miles of underground wire,
in some sixty cities. As already stated, the diffi-
culties experienced from retardation and induction
are greatly increased in underground work, and
hence the length of buried conductor that can be
used is limited.
Experience having made manifest the difficulties
which have been detailed, and the remedies having
been learned, they were at once applied. But before
they were learned much work had been done, and to
bring this up to the proper standard a very general
rebuilding was entered upon, not only of lines, which
had to be changed from iron to copper and con-
verted into metallic circuits, but also of switchboards
and other apparatus.
As there has been improvement of lines, there has
also been a steady improvement of apparatus, and
the result is that it is now possible from any properly
appointed station to talk north and east to Augusta,
Me., north to Concord, N. H., Buffalo, and Mil-
waukee, west to Chicago, and south to Washington,
Cincinnati, Nashville, and Memphis ; and of course
to the principal cities intermediate. This system of
telephonic intercommunication is by far the most ex-
tensive in the world. It may be interesting to note
that within that territory live and do business some-
thing more than one half of the whole population
of the United States, so that it is hardly a figure of
speech to say that one half the people of the country
are within talking distance of one another.
The development and present extent of the tele-
phone business are clearly shown by an examination
of its statistics. On January i, 1881, there were in
use in the United States, for telephone purposes,
29,714 miles of wire. Ten years later, January i,
1891, the wire mileage had reached 331,642 ; and
on January ist of the present year it had grown to
577,231. During the current year there has been a
further increase, bringing the total above 600,000
miles.
It will be remembered that the electric speaking-
telephone became known in the spring of 1876.
On December 20, 1877, 5187 had gone into use in
the United States. Ten years later the number had
increased to 380,277. The number in use October
20, 1895, was, approximately, 660,817.
On January i, 1881, the total number of exchange
subscribers was 47,880. On the same date in 1891
this number had grown to 202,931, and on January
ist of the present year it had still further increased
to 243,432.
Statistics as to the number of connections or
conversations by telephone between exchange sub-
scribers date back to 1884 only. During 1884 it
was 215,280,000, the yearly rate being based on
daily use. January i, 1895, the estimated number
of exchange connections daily in the United States,
made up from actual count in most of the ex-
changes, was 2,088,152, or at the rate of about
670,000,000 per annum. Not only has there been
an increase in the number of subscribers to the
telephone, but there has also been a steady increase
in the average daily use by each subscriber. The
average number of calls per subscriber per day
was, in 1885, five and one half; in 1895, eight
and one half.
With these statistics it will be interesting to com-
pare the statistics of the larger features of the busi-
ness as it has been established in the principal foreign
countries. There are in the United States about
250,000 subscribers. The British Isles, with more
than half our population, have less than 75,000.
France, with a population of 38,000,000, has but
25,000 subscribers, or about as many as New York
and Boston combined. Germany makes a better
showing, having 90,000 subscribers in a population
of 50,000,000 ; but this is less than one half the num-
ber she should have to bring her up to our standard.
Austro- Hungary, with 40,000,000 people, has but
20,000 subscribers ; and Russia, with over 108,000,-
ooo inhabitants, only 9000.
CHAPTER XXI
THE EXPRESS
r I AHE familiar picture of the old-fashioned
stage-coach and horses standing in front of
L an ancient tavern, ready to transport pas-
sengers and merchandise to some distant place,
with the driver perched high on the first seat, and
seemingly conscious of his individual prominence as
the conductor of a very essential method of convey-
ance, quite clearly brings to view the manner in
which the general intercourse of this country was
chiefly transacted during its early years ; and it par-
ticularly suggests, through the personality of the
driver, the means by which small parcels were sent,
and the various errands or commissions he performed,
for they were then customarily intrusted to that
channel of communication between localities. The
vessels then engaged in the carrying trade along the
coast and on the lakes, rivers, and canals likewise
afforded a further method of transportation between
districts which were more readily accessible by water
than by land, and to the masters of such vessels
were confided duties similar to those required of the
stage drivers.
Such methods sufficed until there came into oper-
ation a series of railways, which, with their greater
speed and convenience, necessarily displaced the
stage-coach lines ; and the obligations theretofore
assumed by the stage drivers were naturally trans-
ferred to the conductors of the railway trains.
Many of those conductors had been stage drivers,
and they were employed by the railways because of
their general acquaintance with the people, and their
familiarity with traffic between the cities and towns.
The advent of the railways had given an unusual
impetus to the commercial relations of the country,
so that, on the opening of a through route by water
and rail from New York to Boston, the merchants,
bankers, or others who wished to send small parcels
enlisted the services of not alone the railway and
steamboat employees, but the assistance of their
friends traveling between those cities; for New
York and Boston were then two of the most impor-
tant places in the country, their interchange of busi-
ness was large, and no opportunity was neglected to
secure its prompt transaction. The general demand
thus made upon the time of the railway and steam-
boat employees ultimately necessitated a division of
their labors ; and eventually they were required to
make a choice between acting as agents of the pub-
lic or as servants of their respective companies.
One of the earliest railways to enforce this distinc-
tion was the Boston and Worcester Railway, of
Massachusetts. That road had in its service a con-
ductor by the name of William F. Harnden, who
was one among the many conductors employed by
it and the public as agents in the transaction of their
various interests. Harnden thought best to sever
his relations with the railway, came to New York in
1838, and met James W. Hale, then proprietor of
a reading-room in Wall Street, which was largely at-
tended by merchants and travelers. With him Harn-
den discussed the advisability of separating from
the general railway traffic the business of carrying
parcels and fulfilling orders, and converting it into
an individual enterprise. Harnden's previous expe-
rience in a similar respect enabled him to perceive a
fair opening for his own benefit and for that of the
public in the establishment of an independent ser-
vice between New York and Boston ; and, with the
encouragement of Hale, the express business, as
now conducted, then and there had its conception.
Acting on that determination, Harnden promptly
effected arrangements with the railroad and steam-
boat companies forming the through line via Provi-
dence, and on February 23, 1839, published adver-
tisements in the New York and Boston newspapers
announcing that on March 4th ensuing he would
begin personally to conduct an " express " service
between the two cities, which service would embrace
the purchasing of goods, collection of drafts, notes,
and bills, and the carriage of small parcels. The
137
138
ONE HUNDRED YEARS OF AMERICAN COMMERCE
trip was made from Boston to New York as out-
lined, and was then followed by a regular service
three or four times a week.
Thus the first express, actually known by that
name, had its birth. And here it should be stated
that, although Harnden was first to start an express
between Boston and New York, there were at the
same time others engaged in a similar occupation
throughout New England, having been attracted to
that new field of industry by the opening and ex-
tension of railway lines. Among those who then
embarked in the business was Alvin Adams, who
came from Vermont to Boston early in 1840, and
shortly afterward determined upon the introduction
of a route between Boston and New York, via the
Norwich line. Adams duly advertised his purpose,
and on May 4th in that year began the express which,
under his name, has since become so widely known.
In a short time the express routes between New
York and Boston had attracted considerable atten-
tion, their facilities were regularly utilized by the
general public, including the financial institutions of
both cities, and the transportation companies cheer-
fully assisted in their operations, for the enterprise
had relieved their employees of extra labor, and
materially added to their revenues, besides taking
from them a large amount of responsibility. The
readiness with which the services offered by Harn-
den and Adams had been accepted, and the confi-
dence displayed in intrusting to them valuable
packages and large sums of money for transmission,
are particularly noteworthy facts, as those men at
the inauguration of the business were almost un-
known in mercantile affairs. It was evident they
had no financial resources with which to meet losses
to property in their care, and their only stock in
trade consisted of the special privileges which each
had obtained from the railroad and steamboat com-
panies for the transaction of their business ; but they
soon earned a reputation for efficiency and integrity
that was aptly described in the proverbial phrase,
" with the promptness and fidelity of an expressman."
The success of those lines naturally led to the
formation of others, and from 1840 to 1845 express
routes were opened from New York to Albany,
Philadelphia, Baltimore, Washington, Buffalo, Pitts-
burg, Detroit, Chicago, Cincinnati, Louisville, St.
Louis, and New Orleans, connected with which were
such other expressmen as William B. Dinsmore,
Henry Wells, Edwards S. Sanford, Samuel M. Shoe-
maker, Johnston Livingston, and William G. Fargo.
At that time there were few railroads in the East,
and none beyond Pittsburg ; and transportation be-
tween prominent localities in the West was almost
wholly conducted over the great waterways of the
Ohio, Mississippi, and Missouri rivers, with their
tributaries, which included canals then recently
completed in several of the States to connect those
rivers with the lakes. These formed the most
frequently traveled routes of communication between
the West and the East, and the express was duly
established thereon. Within the next few years rail-
road lines were rapidly constructed throughout the
country, and by them the express was likewise car-
ried, so that its scope was thus steadily enlarged in
all directions. The great trunk-lines which now
cover the United States had not then been projected,
and such railroads as were at that time in operation
consisted of local and independent routes, widely
scattered, and without connection except that which
might be had by steamboat or stage. The express-
men, observing the necessity for through and contin-
uous facilities from point to point, however distant,
arranged to give the public that very essential ser-
vice ; and in bridging these intervals they for a time
called themselves " forwarders," in analogy to the
forwarding business as theretofore conducted, and
which had been the receipt and delivery of merchan-
dise between two carriers not otherwise connected.
The important manufacturing interests, as well as
the largest firms, principally located in the Eastern
and Middle States, were during this period forward-
ing supplies for the country in general by railroad
freight and by vessel — such supplies being most
frequently sent to large cities, particularly in the
South and West, for further distribution ; but with
the inauguration by the express of continuous lines,
those shipments were made directly from point to
point, so that the outlying sections of the country,
which had not theretofore had any considerable
business relations with the important cities, were
brought into close touch with them. In then
endeavoring to increase its business the express
naturally became not only solicitor, purchasing
agent, and forwarder, but was, in a degree, respon-
sible for any commercial credit that might thus be
extended through its influences. The express also
undertook the carriage of letters ; and the public,
quick to appreciate such service, very promptly
availed of it in preference to that of the mail ; but
the venture met with opposition on the part of the
government, and was ultimately abandoned.
Soon after the discovery of gold in California in
1848, when great numbers of people went there to
assist in developing the resources of that region,— in
which the whole country was interested, — the express
LEVI C. WEIR.
ONE HUNDRED YEARS OF AMERICAN COMMERCE
readily anticipated their necessities for prompt and
reliable commercial intercourse with the East by
opening agencies in San Francisco, and at the vari-
ous mining camps on the Pacific coast, for the trans-
mission of packages, money, and gold-dust, and for
the transaction of a banking business.
For several years just previous to 1854, the tend-
ency of the principal expresses had been toward
consolidation of interests, as it was believed that
much better, more prompt, and less expensive service
could be rendered by such association. Accord-
ingly, in that year, through the efforts of Adams,
Dinsmore, Sanford, and others, the routes of Harn-
den's Express, the lines of several minor concerns in
the Eastern States, and those on the steamers run-
ning from New York to Charleston, Savannah,
Mobile, and New Orleans were combined with the
express of Adams & Company, under the title of
the Adams Express Company. Alvin Adams be-
came president, William B. Dinsmore vice-president,
and a board of directors was formed, of which
Edwards S. Sanford, Samuel M. Shoemaker, Johns-
ton Livingston, and others were members. In this
year, also, Wells, Livingston, Fargo, and Butterfield,
through a similar incorporation of lines extending
from the East, via Albany, Buffalo, and the lakes,
to the far West, organized the American Express
Company, with Henry Wells as president, John
Butterfield vice-president, William G. Fargo secre-
tary, Johnston Livingston and Alexander Holland
directors, and Daniel Butterfield, James C. Fargo,
and Charles Fargo superintendents. Likewise in
1854 the United States Express Company was
formed by Kip, Barney, and Marsh, to operate an
express over the then recently completed line of the
New York and Erie Railway, and other routes
extending farther into the West. D. N. Barney
was made president, H. Kip became superintendent,
and T. B. Marsh treasurer. About that time, also,
Wells, Livingston, Fargo, Barney, and others intro-
duced another express on the Pacific coast, under
the title of Wells, Fargo & Company, to form a
through connection, both overland and by water,
with the East. During the next few years several
expresses operated stage lines, and the famous
" Pony Express," between St. Louis and San Fran-
cisco, Wells, Fargo & Company, however, being the
most prominent among them ; and in 1858 that con-
cern, through an association with such lines, formed
the Overland Mail Company, which until the comple-
tion of the Union Pacific Railroad exclusively carried
the United States mails between the Missouri River
and the Pacific coast. In 1855, under the title of the
National Express Company, there were organized
several express routes which had been operated be-
tween New York, Albany, Troy, Saratoga, White-
hall, Rutland, and Montreal. D. N. Barney was
made president, J. A. Pullen general manager, and
E. H. Virgil superintendent. Some time thereafter,
Johnston Livingston and L. W. Winchester, previ-
ously identified with other companies, became active
in its management.
These consolidations of routes, which connected
the principal sections of the country and brought
together in a common enterprise such bright and
energetic men as those mentioned were known to
be, laid the foundation for the thoroughly organized
service of the express as it exists to-day. The
express had then become a recognized necessity in
the commercial and individual transactions of the
country; its lines had ramified in every direction,
until nearly the whole United States was traversed
by them ; it had attracted to itself sufficient capital
to place it on a firm financial basis, and obligations
to insure the safe and speedy transmission of mer-
chandise, valuables, and money were readily as-
sumed, so that when loss or damage did occur, due
reparation was promptly made; and it is current
history, extending from that time until to-day, that
whenever goods or valuables in the care of the
express have been tampered with or stolen, it has
been swift, sure, and untiring in its pursuit of the
offenders until adequate punishment was effected.
In 1 86 1 the Southern Express Company was
organized to operate in the Southern States, and
Henry B. Plant became its president.
Upon the breaking out of the War of the Rebel-
lion the express was the only means of communi-
cation between the soldiers in the field and their
friends at home. For certain of the States it acted
as the gatherer of the soldiers' votes, and transmitted
them to the capitals of such States. The new
securities of the government, which were so largely
purchased by our people, were forwarded by the
government through the express — a choice made
with full knowledge of the fact that the express
afforded greater safety than the mail. The inter-
course thus established was, at the solicitation of
the government, continued after the war had ceased,
and at its further request a contract was made with
the Adams Express Company, acting for itself and
the other express companies, by which the trans-
mission of all the securities and moneys of the gov-
ernment was confided to the express. This function
of the express was especially noted in the award
which was made at the Columbian Exposition to the
140
ONE HUNDRED YEARS OF AMERICAN COMMERCE
Adams Express Company, and the testimonial con-
cluded thus: "The Adams Express Company has,
by the faithful performance of every trust reposed
in it, and the discharge of duties devolving upon it,
enlarged its business to the grand dimensions it now
enjoys, and has achieved the enviable position of a
pattern and guide for all similar corporations."
The further development of the express is remark-
able for the introduction and perfection of a number
of facilities necessary to meet the constantly increas-
ing demands of our 70,000,000 people, — features
of transportation and attendant services that are
peculiarly its own, — and chief among which may be
mentioned its wagon service, now to be found on
almost every avenue or street of our cities, towns,
and villages ; and, in conjunction therewith, its em-
ployment of special cars or trains for transportation
of express matter at high speed between the princi-
pal cities. It has to a great extent created the busi-
ness of transporting varieties of game, poultry, fish,
oysters, fruit, and vegetables to localities where they
are not usually obtainable ; it has originated a novel
method of selling goods for merchants, by collecting
on delivery the amount of the invoice and returning
the cash to the shipper ; it has improved the methods
of collecting the proceeds of negotiable paper, and
assumes therewith the responsibility of an indorser;
it has created and affords the only efficient means
for the safe transportation of moneys and valuables
intrusted to it by the general public, the banks, the
railroads, and the government, and, as indicating
the general recognition of this specially important
feature, it may be stated that during a recent year
there were sent through the express $2,500,000,000,
and similarly shipped by the government $1,500,-
000,000, making a total carriage of $4,000,000,000
in money, no part of which was lost in transit ; it
has introduced at 40,000 agencies the express money-
order system, which thus meets almost every citizen
of the United States at his residence or place of
business, and there affords him a handy and safe
means for transmitting his money to any locality,
such money-orders being universally convertible into
cash — a convenience not otherwise obtainable, for
postal money-orders are only purchasable and
redeemable at large and important offices. This is
an accommodation also impossible for the banks to
render, as they are located at less than 8000 points.
The express has improved the facilities for immedi-
ate transportation of foreign goods from the port of
entry to destination, by accepting and carrying them
under heavy bonds to the government.
These are some of the features of the express
which distinguish its services from mere acts of
transportation, and indicate that its facilities cover a
much wider range of operations than originally de-
signed, particularly such as are not afforded by any
common carrier, and which necessitate the assump-
tion of obligations and liabilities not contemplated
by any other agency of commerce.
The great lines of railway communication are a
necessary adjunct to the successful conduct of the
express business, but they are an adjunct only.
Were the express dissolved the railway lines could
not supply the needs of the public. There is an
interval between the act of transportation and the
demands of the public which railway companies do
not fill, and were not organized to fill, and which
renders the express so essential to the general wel-
fare of the community. The express, in its turn, is
among the most efficient supporters of the railway
systems ; it purchases the right of transportation at
wholesale, and sells it at retail to the public, at prices
fairly remunerative and universally accepted.
In round numbers, the routes of the express now
cover 200,000 miles of railroad, steamboat, and
stage lines ; the number of packages of merchandise
annually carried is over 100,000,000; the number
of money packages transported is 20,000,000 ; the
number of money-orders issued is 7,000,000 ; it em-
ploys 50,000 men at 40,000 agencies, uses 15,000
horses and 6000 vehicles, and it has an aggregate
capital of over $60,000,000.
And now, when consideration is given to the
prominence achieved by the express in the history
of this country through the services it has rendered,
not alone to the people at large, but to the United
States government, there will be no hesitation in
acknowledging that its usefulness may not be mea-
sured by any ordinary standard of comparison ; it has
constantly aided commerce by opening new markets
for the sale, purchase, and distribution of the pro-
ducts and manufactures of the country, and has
promoted individual communications and financial
transactions to an extent not attainable by any other
means ; it is distinctively of American birth, and
not elsewhere are there similar instrumentalities so
combined in one efficient and complete system.
CHAPTER XXII
THE STREET-RAILWAYS OF AMERICA
IT is not necessary to turn back the pages of his-
tory a century to present a complete account of
the inception and development of street-railways
in the United States or the world. The first horse-car
ever known appeared upon the street in New York
as late as 1832, but the idea of conveying people in
vehicles over iron rails was put to very little practi-
cal use until nearly twenty years later. The history
of street-railways in America, therefore, is practi-
cally confined to the last half-century; and yet there
are now in the United States nearly 1000 street-rail-
way systems, with a total mileage of nearly 14,000,
and a capitalization exceeding the enormous sum
of $1,300,000,000. These simple figures, of such
magnitude as to be almost impossible of compre-
hension, are sufficient to indicate the growth and
extent of the street-railway service of this country.
This extraordinary development of the idea, con-
ceived by John Stephenson, of placing the wheels
of an omnibus upon iron rails instead of dragging
them over cobblestones, may be divided into three
parts : First, street-railways operated with horses as
separate organizations; second, the substitution of
mechanical traction by means of a cable ; third, the
inauguration of electricity as a motive power, with
all that the adaptation of this wonderful agency to
practical uses conveys both for the present and the
future.
Sixty-five years ago, there lived in New York a
man who had served his apprenticeship and begun
work for himself as a builder of carriages. He was
only twenty- four years old. His name was John
Stephenson. That he built strong and handsome
coaches while engaged in that occupation is evi-
denced by the world-wide reputation which he
subsequently acquired. That he was not content to
pursue that occupation in the stereotyped manner of
his predecessors is shown by the fact that before
reaching the age of twenty-five he conceived the
idea of transporting passengers, as millions are
transported to-day, over rails laid upon the pave-
ments of city thoroughfares.
The immediate development of this conception
was the inauguration, in 1831, of the New York and
Harlem Railroad, which obtained a charter to oper-
ate a street-car line through Fourth Avenue in the
city of New York. This road was constructed and
opened in November, 1832, Stephenson building the
first car drawn over the track. If a duplicate of that
car should be made to-day, and placed upon the
street of any city in the Union, it would attract no
less attention than a Roman chariot. Prior to that
time there had existed only two forms of public con-
veyance. One was the English railway-coach ; the
other was the American omnibus. Stephenson's car
was a combination of the two. Outwardly it resem-
bled the omnibuses used on Broadway until a few
years ago, when they succumbed to the more con-
venient and comfortable street-cars. Its exterior was
divided hito three compartments, after the English
idea, and it a 
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